ORAL ANSWERS TO QUESTIONS

COMMUNITIES AND LOCAL GOVERNMENT

The Secretary of State was asked—

Planning

Julian Smith: What steps his Department has taken to make the planning system more accessible to local people.

George Freeman: What steps his Department has taken to make the planning system more accessible to local people.

Nicholas Boles: For the first time ever, people who are not councillors or planning officers can get involved in drawing up a plan for their community that has full statutory weight. More than 540 communities have been designated as neighbourhood planning areas and a further 210 have applied.

Julian Smith: Constituents in Skipton, the gateway to the Yorkshire dales, continue to be frustrated about the overturning of planning decisions in Bristol when those have been taken locally in Craven. What advice can the Minister give to my constituents?

Nicholas Boles: The best defence and the way to guarantee that the local authority representing local people is in the driving seat is for that local authority to get on and complete its local plan. That is sometimes a difficult process, but that is the best thing to do—to get on and complete that local plan.

George Freeman: Does the Minister agree that for far too long under the previous Government planning was something that seemed to be done to communities, rather than by them? Last week I attended and spoke at the public inquiry into the potential development of the Tiffey valley, which South Norfolk district council, with a five-year land supply, is defending. What assurance can my hon. Friend give me that under the Localism Act 2011, which we all supported in this House, councils that have a land supply and are seeking to implement a town plan can be assured of the Government’s support?

Nicholas Boles: It is true that we have finally, after a certain amount of effort, managed to scrap the regional strategies that the previous Government used to impose entirely unwanted plans on local communities. The best way to ensure that local decisions will be supported and will stick is for local authorities to have a clear plan which sets out how they will meet their objectively assessed needs. That means that they can pick and choose where and how those needs will be met.

Ann Coffey: Planning guidance about a material change of use from a residential house to a children’s home necessitating a planning application is unclear. Last July, in response to my Adjournment debate, the then Under-Secretary of State, Department for Communities and Local Government, and now the Comptroller of Her Majesty’s Household, the right hon. Member for Bath (Mr Foster), said that he would continue to keep under review the planning guidance in relation to that. Has there been any progress? As the Minister will appreciate, many local people would welcome the opportunity to contribute to a planning application because of the safeguarding issues surrounding children.

Nicholas Boles: We have no further plans at this point, but I am happy to meet the hon. Lady to explore the issue further, if she would appreciate that.

Roberta Blackman-Woods: In last week’s debate on high streets, my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) said that on her high street Nos. 14, 37, 38 to 40, 44, 48 to 50, 52, 60, 70, 72, 93 to 95, 175 and 206 are all betting shops, pay-day loan outlets or pawnbrokers. Does the Minister honestly think this is what local people want? Will he explain to the residents of Deptford and elsewhere why his Government are making it harder, not easier, for communities to stop such premises taking over their high street and town centre?

Nicholas Boles: Local authorities have a range of powers under planning rules and licensing to restrict the growth of these various uses. However, the hon. Lady must say why the Government whom she supported did more to relax licensing laws to encourage the growth of gambling, and only now in opposition seem to have changed their mind about this business.

David Heath: Local authorities whose local plans have been found wanting find themselves under siege from opportunistic developers. The result is planning applications in places such as Evercreech which are the reverse of what local people want. Can the Minister say that emerging local plans will have material impact on planning decisions, and can he make sure that local authorities resubmitting plans get to the top of the list to stop this happening further?

Nicholas Boles: The best way to stop this happening is for local authorities to get their plan right the first time, but if revisions have been made, once the plan has been through the public consultation phase, does not have a huge number of unresolved objections and has been submitted to an inspector, it certainly can start gathering weight. The precise position is set out in the revised planning guidance that is currently open for consultation.

Bill Esterson: Is not the reality that it is the relaxation of planning laws over recent months that is making matters worse for local communities trying to deal with the growth of payday lenders, bookmakers and unwanted fast food outlets, and that it is the Government who are adding to the problem?

Nicholas Boles: No, that is not the reality, as is almost always the case when the hon. Gentleman asks a question about planning law.

First-time Buyers

Paul Maynard: What steps he is taking to help first-time buyers get on the housing ladder.

Chloe Smith: What steps he is taking to help first-time buyers get on the housing ladder.

Kris Hopkins: The Government are committed to supporting people’s aspirations to own their own home. In just six months, our Help to Buy scheme has helped over 15,000 households reserve a new home for themselves and their families. The scheme is proving extremely popular with first-time buyers.
	May I also take this opportunity to pay tribute to my predecessor, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), for all his hard work, commend him for the gracious way he has handled himself and thank him for his generosity towards me?

Paul Maynard: I welcome the Minister to his new post. Many critics of Help to Buy point to the possibility of a housing bubble, but they clearly have not visited the north-west, where house prices have fallen over the past year. Why should first-time buyers in Blackpool North and Cleveleys be prevented from getting on the housing ladder because of metropolitan snobbery and petty envy?

Kris Hopkins: I thank my hon. Friend for his question. I agree that at the moment there is a huge media focus on London and the south-east. As a northern MP, I know that if we remove London and the south-east from the national figure of 3.8% for price rises, we get 2.1% for our part of the country, but several other parts have seen no increase at all, so we need to stick up for the Blackpools, Burnleys and Bradfords as well.

Chloe Smith: The average earnings for my constituents working full time last year were under £23,000, so they know all about why it is right to cap benefits so that people who work hard are not undermined by those who live off the taxpayer. Meanwhile, the average home in Norwich North sells for around £145,000. Does the Minister agree that Help to Buy can help make the dream of home ownership a reality for those people?

Kris Hopkins: I thank my hon. Friend for her question. Since the housing crash in 2008, many families in her constituency have struggled to get on the housing ladder, and the Help to Buy mortgage guarantee scheme, in particular, helps people like those she has mentioned. The tremendous response that RBS, for instance, has had, with some 10,000 inquiries in the first four working days, demonstrates that the Government are on the side of hard-working people and will support people like the constituents she mentioned.

Clive Betts: I welcome the Minister to his new responsibility. Last week the Communities and Local Government Committee had the Department’s permanent secretary and officials before us. We asked about the impact of the Help to Buy scheme on new house building. They said that the equity share element would add a maximum of 5,000 new homes a year, but they could not give us any assessment at all of the impact of the mortgage guarantee element. Is that because the Government, like everybody else, now believe that the scheme will have a minimal impact on house building but a significant impact on house prices?

Kris Hopkins: I thank the hon. Gentleman for his kind words and look forward to working with the Select Committee. The Government have delivered 334,000 houses so far, 84,000 of which are affordable homes, and put a range of mechanisms in place to deliver houses. That is what is really important to people out there.

John Stevenson: The Government are absolutely right to help first-time buyers, but of equal importance are those who wish to move up the housing ladder but cannot do so without the first-time buyers entering the market. Does the Minister agree that the second-hand market is therefore as important as the sale of new homes, and what will he do to support it?

Kris Hopkins: New build is really important, but my hon. Friend is right that we must also stimulate the existing housing market. The mortgage guarantee scheme covers existing housing, so I suggest that he goes out to promote it to residents in his beautiful city of Carlisle.

Heidi Alexander: One of the real problems for first-time buyers is that simply not enough homes are being built to meet demand. In Lewisham, of the 15,000 homes that have been granted planning permission over the past six years, more than 9,000 are yet to be built. Is it not about time that developers were told, “Use it or lose it” when it comes to planning permissions?

Kris Hopkins: I want to promote investment in the housing market and to give developers confidence. The reality is that we have delivered 15,000 new homes through our Help to Buy scheme, and 1,000 of those were in London alone.

Social Enterprises (Funding)

Barry Sheerman: What steps he is taking to encourage local communities to fund social enterprises through crowdfunding and other new forms of finance.

Stephen Williams: I follow my ministerial colleague in thanking my immediate predecessor, my right hon. Friend the Member for Bath (Mr Foster), for the smooth handover into this post; it is always a good idea to be nice to the Chief Whip.
	My Department established the community shares unit in October 2012, with £590,000 of funding over three years. Since then, communities have raised £16 million from 70 share offer launches. That is a significant increase on the £3 million raised the year before.

Barry Sheerman: I welcome the Minister, who was a very good member of the Education Committee under my chairmanship, to his new job. Is he aware that crowdfunding is how we could get a real renaissance of communities up and down the country? It is in peril at the moment because in the private and social enterprise sectors it is threatened by inappropriate regulation from the Financial Conduct Authority.

Mr Speaker: I am told that the hon. Gentleman has kept a list of all those members of his former Committee who went on to become Ministers. He will have satisfied himself of the causal link.

Stephen Williams: Mr Speaker, there are many distinguished alumni of that Committee, and I greatly enjoyed my three and a half years under the hon. Gentleman’s chairmanship.
	The hon. Gentleman is chair of the Westminster crowdfunding forum. At the moment, the sector is completely unregulated; I am aware that the hon. Gentleman has recently raised concerns in The Sunday Times. If he has specific concerns about the heavy hand of regulation, he should write to me and I shall raise the matter with colleagues at the Treasury, the Department for Business, Innovation and Skills and the Cabinet Office.

Localism

Sheryll Murray: What steps he is taking to promote the take-up of the community rights introduced by the Localism Act 2011.

Stephen Williams: The provisions of the Localism Act 2011 have been able to be adopted for the past 12 months, and there have already been more than 1,000 such uses. We continue to promote use of the 2011 Act through local partners and the media. In addition, I am discussing the potential for cross-Government working, combining community rights and volunteering.

Sheryll Murray: A play park in East Looe in my constituency has been identified for possible housing development. It is the only green space in the area where children can play and where wildlife can live. What steps can the residents take under community rights to protect their long established and important local amenity?

Stephen Williams: My hon. Friend and other coalition colleagues across Cornwall will be pleased to know that Cornwall is a hotspot for use of the 2011 Act. In my first couple of days in office, officials showed me a map revealing that the 2011 Act had been incredibly popular, with more than 50 assets so far having been registered as being of community use. Through local plans across Cornwall itself, or through neighbourhood plans, local communities should be able to identify areas for special protection and use a local neighbourhood plan to attract sufficient homes, jobs and other essential services. My advice to my hon. Friend is that she should perhaps use a neighbourhood plan.

Nicholas Dakin: When the Secretary of State visited ex-Ministry of Defence sites in Lincolnshire, he saw first hand the poor state they can be left in when the transfer of community assets is done badly by the MOD. What discussions has the Department for Communities and Local Government had with the Ministry of Defence to ensure that in future there is better transfer of assets, such as those in the Kirton-in-Lindsey
	area in my constituency, and that we do not have continuing sores in our communities, as has been the case in parts of Lincolnshire as a result of heritage?

Stephen Williams: I thank the hon. Gentleman for raising that issue; he will understand that I have not been aware of it in my first couple of weeks in office. I understand that the Secretary of State is aware of it and has already corresponded with the Ministry of Defence about it. I am sure that we will be in touch as soon as we hear an answer from ministerial colleagues.

Cheryl Gillan: Will the Minister join me in congratulating my parish council in Chalfont St Peter on taking advantage of the Localism Act and producing a fantastic neighbourhood plan, which has been published this month and will be consulted on until 29 November? Does he agree that an important part of localism is getting local people to respond to such plans? Will he give some encouraging words from the Dispatch Box to residents in Chalfont St Peter, to ensure that we get maximum feedback on that excellent local plan?

Stephen Williams: One of the areas I was really pleased to find that I had responsibility for when I took up this post was neighbourhood planning, because my own constituency has made good use of it. The residents of Chalfont St Peter should be congratulated on embarking on this process. I am sure that any assistance that the Department can give and any guidance that is available will lend a hand.

Empty Buildings

Pauline Latham: What steps his Department is taking to bring empty and redundant buildings back into use.

Eric Pickles: With the new homes bonus we provide £235 million in grant and £130 million to local authorities for homes brought back into use. We have revised and are further reviewing permitted development rights. Since 2010, over 40,000 homes that were long-term empty have been brought back into use.

Pauline Latham: Does my right hon. Friend agree that bringing empty homes back into use is important not only as a sustainable way of increasing the local housing supply but because it can alleviate the negative impact that neglected empty homes can have on communities in constituencies like mine and similar areas?

Eric Pickles: My hon. Friend makes a very reasonable point. Derbyshire has benefited from £600,000 of empty homes funding, and I am sure that that will make quite a difference to her constituency. The substantive point is that this not only gets housing back into stock but means that streets and communities are not blighted. It is a win-win for just about everybody.

Alison McGovern: But what about the 300 empty homes in Wirral since the advent of the bedroom tax, including a block in my constituency that now looks set to be demolished without any plan
	for a replacement? This threatens dereliction in parts of Wirral. Is the bedroom tax not causing empty homes and risking antisocial behaviour, and is it not a false economy, never mind bringing empty homes back into use?

Eric Pickles: The hon. Lady exaggerates. The spare room subsidy is a reasonable and effective way we can ensure housing for people who need it where there is a shortage of housing. It is absolute nonsense for Labour Members to complain about empty homes: on their watch, we lost 420,000 houses in this country, and that is a disgrace.

Andy Sawford: On our high streets 40,000 shops—one in seven—are sitting empty, partly because of very high business rates. Will the Secretary of State support our proposals to give local retailers an average saving of £450 a year by freezing business rates?

Eric Pickles: Under the previous Labour Government, business rates shot up. We have offered local authorities and small businesses a complete removal of business rates through discounts. Under Labour, it was much more difficult to obtain those discounts. Frankly, the hon. Gentleman has got a cheek to make that suggestion.

Council Tax Support

Alex Cunningham: What recent assessment he has made of the effects on people on low incomes of council tax support schemes.

Brandon Lewis: These are local schemes and it is therefore for local authorities to ensure that the effect on low-income council tax payers is proportionate and fair. This coalition Government have made a £100 million transition grant available to help councils to develop well designed schemes and maintain incentives to work.

Alex Cunningham: That is a pittance. Last week the Minister said on the BBC that he was making sure that councils have the ability and the money to protect the most vulnerable people from his council tax benefit changes. How many of the vulnerable—the disabled, carers, war veterans and war widows—have been affected by the policies he has imposed on the nation?

Brandon Lewis: As I said, these are local schemes. I can confirm to the hon. Gentleman that under Labour spending on council tax benefit hit £4 billion a year, costing hard-working families almost £180 a year and costing more than education, defence and health combined. This Government are dealing with the mess of the economic deficit and debt left by his party’s Government.

Helen Jones: Does the Minister believe that disabled people being summonsed to court, three-bedroom houses that cannot be let and poor people having to choose between paying their council tax bill and eating constitutes a success? If so, what would constitute a failure?

Brandon Lewis: Failure would be going back to the policies of the old Labour Government, when council tax and spending on council tax benefit doubled, costing hard-working families about £180 a year each. That is exactly why this Government have put in £100 million to help councils have the time and space to develop good schemes to protect the most vulnerable, which they have a duty to do, and it is also why we have protected pensioners.

Local Government (Savings)

Damian Hinds: What recent guidance he has given to councils on delivering savings in local government.

Eric Pickles: I published “50 ways to save”, a practical guide for councils, which describes how they can make the most of their budgets to deliver savings, protect front-line services and keep council tax down.

Damian Hinds: East Hampshire district council has saved more than £5 million since 2010 by joining forces with Havant borough council and establishing a joint senior management team. What other such opportunities might exist elsewhere and what guidance has been given?

Eric Pickles: I commend East Hampshire and Havant councils for their excellent work together. To be frank, this is the future, whether we are talking about a relatively small district, a county or a unitary authority. It makes sense to work together on joint procurement, joint use of offices and shared services. That is probably one of the reasons why the recent BBC ICM poll shows that in many areas resident satisfaction in services such as rubbish collection, schools and libraries is improving.

Andrew McDonald: The Prime Minister says that we are all in this together, but between 2010-11 and 2012-13 his local authority of West Oxfordshire—one of the least deprived in the country—is losing only £34 per head, compared with Hackney, the most deprived area in the country, which faces a massive cut of £266, and my constituency, which faces a cut of £234. Does the Secretary of State think that is fair and will he reassure the House that the local government financial settlement for 2013-14 will narrow the gap?

Eric Pickles: If the hon. Gentleman is going to ask a Whips’ question, he should at least try to memorise it. He will know that the top-spending authorities, which are largely Labour authorities, are getting something like an extra £700 per household. To compare a tiny district council with his own is utterly ridiculous.

Philip Hollobone: Through the Secretary of State, may I thank the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) for visiting Kettering borough council last week? Would the Secretary of State like to take this opportunity to congratulate the council, which for the past three years has frozen council tax, has not cut any front-line services and has maintained all its grants to the voluntary sector?

Eric Pickles: That just shows what a committed Conservative council will do, compared with Labour authorities, which seem to be interested in shroud-waving and cutting front-line services.

Luciana Berger: Liverpool city council will have seen a real-terms Government grant cut of 56% between 2010 and 2017. That £329 million reduction means that come 2017 we will have a shortfall of £17 million for mandatory services. Why are the most deprived areas being hit the hardest?

Eric Pickles: We are funding hard-hit areas to a greater extent. Something like the amount of money paid per household in Liverpool will be well above the amount that is paid in more prosperous parts of the country. I do not recall the hon. Lady saying that kind of thing when we put together the multi-million-pound city deal for Liverpool.

Local Authority Recycling Sites

Valerie Vaz: What recent assessment he has made of the availability of local authority recycling sites.

Brandon Lewis: We do not hold that information centrally, but I was pleased that the recent ICM poll for the BBC, which the Secretary of State has mentioned, showed that resident satisfaction with both recycling and refuse collection has risen while council tax has been kept down.

Valerie Vaz: The main recycling facility at a supermarket in my town centre has been removed by the council, so my constituents have to drive to Aldridge or Bloxwich to recycle paper, cardboard and bottles. What steps can the Minister take to support the council to return the facility to the town centre?

Brandon Lewis: As the hon. Lady knows, we are very keen on weekly waste collection. I was pleased to see the satisfaction with recycling go up. I am sure that, with her efforts, a good local consensus will be found. I am delighted that she is singing from the same hymn sheet as the Secretary of State.

Anne McIntosh: May I commend Hambleton and Richmondshire district councils for their responsible recycling? What conversations has my hon. Friend had with Ministers in the Department for Environment, Food and Rural Affairs on reducing the amount of packaging? Seldom do I find myself agreeing with Jeremy Clarkson, but on this occasion he may be right.

Brandon Lewis: My hon. Friend makes a good point. My colleagues at DEFRA are very focused on that issue. Somebody once made the fair point that recycling should be a last resort, because we should deal with packaging as a first resort.

Fire and Rescue Service

Mary Glindon: What assessment he has made of the current dispute in the fire and rescue service; and if he will make a statement.

Brandon Lewis: I welcome the fact that Saturday’s industrial action was called off, as I am sure do Members across the House. That was a direct result of my Department’s facilitating constructive discussions between the employers and the Fire Brigades Union. I hope that that will provide the basis of a lasting agreement which ensures that hard-working firefighters have one of the most generous pension schemes in the public sector, while being fair to taxpayers.

Mary Glindon: Like the Minister, I welcome the fact that the firefighters’ strike that was planned for last Saturday was called off. I hope that the decision to conduct further talks will result in fruitful negotiations and sound guarantees for the firefighters. Will he tell the House why industrial action had to be called before he would agree to talks through ACAS?

Brandon Lewis: If I may correct the hon. Lady, it was my suggestion to involve ACAS. I cannot say why the Fire Brigades Union called the strike action in the first place. We said that it was unnecessary and we still believe that it is unnecessary. We hope that the Fire Brigades Union and the employers implement the principles that they agreed with our facilitation to ensure that nobody is left without a job or a pension at the age of 55.

Bob Neill: I congratulate the Minister and his officials on the sensitive way in which they have carried out the difficult negotiations. Will he confirm that, subject to the sensible resolution of details between the employers and employees, the cost envelope and principles that have been agreed will not only protect firefighters in cases of genuine ill-health retirement, but allow them in cases of full service to retire on one of the most generous pension schemes in the public sector?

Brandon Lewis: I thank my hon. Friend for his kind comments. As he will know from the excellent work that he did in negotiating with the Fire Brigades Union for the first two years of this Government, the issue of fitness and capability is for the employers to resolve, not the Government. I am pleased that we were able to facilitate the parties in coming together and I hope that they will come to a conclusion that ensures that firefighters have one of the best pension schemes in the public sector.

Chris Williamson: The Minister responsible for the fire service has not been doing his job. First, he wanted to privatise the fire and rescue service; then he imposed reckless cuts on it. Now he is suggesting that the fitness standard should be lowered so that front-line firefighters can be forced to work until the age of 60. Does that not display contempt for these courageous public servants who risk their lives to keep
	us safe? Does he not agree with me that it would be more appropriate if he did his job? If he had done it properly in the first place, the dispute could have been avoided.

Brandon Lewis: The hon. Gentleman does himself a huge disservice in the way that he puts the question, for a couple of reasons. Putting aside the fact that the retirement age of 60 came in under the Labour Government in 2005, the issue about fitness and capability is, as I have said, for the employers and the Fire Brigades Union to resolve. I am delighted that we have brought them together.

Tony Baldry: Everyone appreciates the work that is done by the fire and rescue service. However, is there any reason why firefighters should have a public pension that is more generous than those for the armed forces and for police officers?

Brandon Lewis: My hon. Friend is quite right. He reminds me that the hon. Member for Derby North (Chris Williamson) also made a point about privatisation. As has been made clear a number of times from the Dispatch Box, that is a fallacy that he made up. I know that he continues to perpetuate it, but it is a complete fallacy and is not what this Government are doing.
	My hon. Friend the Member for Banbury (Sir Tony Baldry) is right that firefighters will end up with one of the best schemes in the public sector and that the age is being brought into line with the police and the armed forces.

Adapted Housing (Disabled People)

Cathy Jamieson: What estimate he has made of the average cost of adapting properties for disabled people who move home because of the under-occupancy penalty.

Stephen Williams: We have provided local authorities with £25 million of discretionary housing payments this year to assist under-occupying disabled people who live in significantly adapted accommodation and who are affected by the removal of the spare room subsidy to remain in their homes.

Cathy Jamieson: Does the Minister agree that it makes absolutely no sense to move people who have had their homes adapted to other homes where they are in danger of having to incur further costs on the public purse? I have heard from people who received a discretionary housing payment in the first round, and they are now being told that they will not get one. Will the Minister assure my constituents, and those across the country, that they will not be forced out of their homes when they have a disability?

Stephen Williams: The fund is discretionary so it is up to local authorities—including those in Scotland—to decide how to spend the money. We would obviously expect them to take into account the public money spent on that property previously, and consider what is in the best interests of the tenant.

Emma Reynolds: I welcome the Minister to his new responsibilities.
	More than half of those hit by the bedroom tax are disabled, and nine out of 10 disabled people who are not receiving discretionary housing benefit are cutting back on food or bills and having to choose between heating or eating. Does the Minister advise them to put on another jumper, skip a meal, or move to a non-adapted property that then has to be adapted at huge cost to the taxpayer?

Stephen Williams: I, too, welcome the hon. Lady to her post.
	I would not presume to advise an individual at all; each individual must make up their own mind about how they will adapt to a change in circumstances. I advise local authorities, housing associations and local advice bureaux to work holistically with each tenant affected by the policy, and to consider what advice and support can be given so that they can transition to the new arrangements.

Under-occupancy Penalty

Pamela Nash: What assessment he has made of the availability of smaller properties for people affected by the under-occupancy penalty.

Meg Hillier: What assessment he has made of the availability of smaller properties for people affected by the under-occupancy penalty.

Stephen Williams: The Department and the Homes and Communities Agency publish information annually on the number of social rented properties by size, and during the year the number of properties available for letting will vary.

Pamela Nash: I welcome the Minister to his new position, but I must say that that answer was rather vague. It has been reported that there are enough one and two-bedroom social housing properties for only 4% of those affected by the bedroom tax. Does the Minister expect the other 96% of those affected to go into private lets? If so, will that not send housing benefit payments shooting upwards, rather than cutting them?

Stephen Williams: Clearly, the implementation of this policy will take a while, and each tenant must weigh up their own circumstances and consider how they adapt. As I said previously, I expect local authorities to work with all housing providers in an area, including the private sector—in my constituency more people rent in the private sector than in the public sector—and consider the best use of stock and what assistance is most appropriate for the individual.

Meg Hillier: In Hackney, 3,581 households are affected by the bedroom tax, and since April only 70 have been helped into smaller accommodation. The scale of the problem is such that to meet demand we need just under 2,000 one-bedroom properties, and just over 1,200 two-
	bedroom properties. The Minister may say that we should look at other solutions, but what solutions does he suggest for a borough such as Hackney?

Stephen Williams: I do not have information for the hon. Lady’s constituency, but across London 78% of people on housing benefit are unaffected by these changes, and many of the balance will be affected only by one bedroom. As I said, I expect local authorities, including Hackney, to look across all housing providers in the area and consider best use of the stock. The hon. Lady’s constituency and mine are not utterly dissimilar, and there may be people living in overcrowded accommodation in the private sector who could move into houses that are freed up in the social sector. Then everyone would be better off.

Lyn Brown: Will the Minister confirm that the Government will save money with their bedroom tax only if families who are hit are unable to move? Will he be clear: will the bedroom tax be a success if people move, or if they cannot?

Stephen Williams: Each circumstance is different. As I said to the hon. Lady’s London colleague, the hon. Member for Hackney South and Shoreditch (Meg Hillier)—I am sure this is also true in West Ham—there may be people living in overcrowded conditions in the private sector who desperately want bigger accommodation that is available only in the public sector. That is the housing casework that has come to me over the past eight and a half years of representing an inner-city constituency. We are spending huge amounts supporting people in overcrowded conditions, and across the private and public sectors we are not making best use of the housing stock available.

Section 106 Agreements (Schools)

Bob Russell: If he will make it his policy that planning authorities ensure that section 106 agreements produce adequate funds to finance the building of schools forming part of the planning approval when granting consents for major residential developments.

Nicholas Boles: The national planning policy framework is clear that development should be sustainable, and that local authorities have a responsibility to make plans to provide the necessary infrastructure to meet the needs generated by new development.

Bob Russell: I am most grateful to the Minister; he could not have been more clear. With that in mind, will he agree to meet me and representatives of the Essex education committee so that we can avert a monumental planning blunder? Consent is about to be granted, or could be granted, for 1,600 homes when the section 106 agreement is seriously deficient.

Nicholas Boles: I know that my hon. Friend has already met the Secretary of State about this issue and has also asked for the application to be called in by the Department. That means that one of us has to be able to decide the
	issue. I therefore hope that my hon. Friend will understand if I do not take up the offer of a meeting, for fear that no Minister will be left to decide.

Mr Speaker: The hon. Member for Colchester (Sir Bob Russell) will be pleased to have exhausted the ministerial team.

Local Authority Performance

Mark Pawsey: What representations he has received on the effectiveness of independent assessments of the performance of local authorities.

Brandon Lewis: My hon. Friend may well know that we have reduced burdensome top-down assessments of the performance of local authorities. We have abolished the unnecessary and invasive comprehensive area assessment, and strengthened local accountability through transparency measures, making councils accountable to the local people who elect them. The recent BBC ICM poll suggests that residents are currently happy with council services.

Mark Pawsey: Councils across the country have reason to be grateful to the Secretary of State for getting rid of the costly and bureaucratic comprehensive area assessments, and for replacing them with an optional system of councils inviting local government leaders to conduct a review. In that regard, has the Minister seen the very positive outcome for Conservative-controlled Rugby borough council? Its report was overwhelmingly positive and the leader was described as providing a
	“strong and progressive focal point”.

Brandon Lewis: Getting rid of comprehensive area assessments has saved the public purse around £28 million a year. On top of that, work going on now means that there is a constructive, involved approach from the sector—opening up and looking more sensibly at what works—rather than a tick-box culture. I am delighted that such a good Conservative authority is showing so highly in the process.

Andrew Gwynne: The Minister will be aware that the Local Government Association has independently assessed that Tory-led West Somerset council will not be financially viable in future. How many more local authorities does he believe will not be financially viable in future as a result of his Government’s cut to local services?

Brandon Lewis: The hon. Gentleman gives a good example of where the sector and the LGA are working closely with the council to help it to work its way through shared management, particularly shared senior management, and shared services, which will bring the kind of savings needed—it is a small district council serving just 35,000 residents—and take things forward in a prudent and sensible way. That is the sector helping itself rather than the old tick-box culture that cost everybody so much.

Localism

Graham Evans: What steps he is taking to promote the take-up of the community rights introduced by the Localism Act 2011.

Stephen Williams: I refer my hon. Friend to the answer I gave to our colleague, my hon. Friend the Member for South East Cornwall (Sheryll Murray), in Question 5.

Graham Evans: Will the Minister explain how his Department is providing information, guidance and funding to help community groups in my constituency to exercise their rights?

Stephen Williams: Yes. The Department has so far made £60 million available to communities to support them in taking up their community rights. I advise the hon. Gentleman to advise his constituents to look at the booklet we have published, “You’ve got the power”, and—more likely—at the website, mycommunityrights. org.uk.

Topical Questions

David Crausby: If he will make a statement on his departmental responsibilities.

Eric Pickles: I welcome the hon. Ladies and hon. Gentlemen on the Opposition Front Bench to their new responsibilities. I hope they will be very happy.
	In the past week, we have announced a series of measures to help families in housing. Local people and armed forces rather than foreign nationals will be given priority in council house waiting lists; fraudsters who illegally rent out their social homes for profit will face new criminal sanctions; private tenants will be better protected from the small minority of rogue landlords and letting agencies; and family-friendly tenancies will be supported as part of the move to expand the provision of quality rented houses. The Government are on the side of hard-working people, backing those who do the right thing.

David Crausby: Everyone in Bolton is working hard, despite difficult circumstances, to revitalise our town centre, but one of our biggest problems is expensive car parking. While the council is doing its bit to help, what can the Secretary of State do to encourage local authorities to deliver free car parking schemes, so that town centres can compete with out-of-town shopping?

Eric Pickles: What an excellent question. I agree entirely that local authorities have a responsibility. When my own local authority introduced half an hour free parking throughout the borough, it made an enormous difference. Expensive parking is cutting off the nose to spite the face. The more people come into a town centre, the more profitable it becomes and the better it is and the more people feel it is like home.

George Hollingbery: My constituency is home to a great many members of the armed forces. As is well known, levels of home ownership are below average among this group, not least because credit is difficult to obtain for a whole slew of reasons particular to the profession. Will the Minister update the House on the progress made in addressing this problem?

Kris Hopkins: As a former soldier, I thank my hon. Friend for asking that question and applaud him for his interest. Every day, a military family is taking up home ownership as a consequence of the Government’s intervention. To date, 780 families have taken advantage of First Buy and our home loan equity plan.

Hilary Benn: In April, the Secretary of State imposed a council tax increase on more than 2 million people on low incomes, because of his changes to council tax benefit. In response to a survey from my office, 112 councils revealed that 156,000 people, including the disabled, carers, veterans and war widows, have already received court summonses. Citizens Advice is seeing people who are having to choose, as it puts it, between staying on the right side of the law and feeding themselves. Since the right hon. Gentleman is responsible for the position they now find themselves in, what advice would he give them about what they should do?

Eric Pickles: My advice is, “Don’t use bogus statistics and bogus surveys.” The official statistics show clearly that the numbers of summonses and collections are in a much better position than they were under Labour. I remind the right hon. Gentleman that there were 3 million summonses a year under Labour. Collection is up and defaulting is down.

Hilary Benn: Once again, the Secretary of State does not want to take responsibility for the change he introduced. He should be very careful before he accuses local authorities of producing bogus statistics. I have here the reply from Brentwood council, which issued has 250 summonses; I have here the reply from Epping Forest council, which has issued 337 summonses; and, as the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles) is sitting there looking at the floor, I will tell him that South Kesteven has issued 585 summonses. Is it not the truth that the Secretary of State is in denial about the facts and the hardships that his tax rise is causing to people who, remember, are on the lowest incomes, which is why they receive council tax benefit?

Eric Pickles: The right hon. Gentleman should be careful. I was not accusing councils; I was accusing him. He talks about Brentwood council: its statistics show that there is virtually no change from the previous year. He is trying to make bricks out of straws. He had a campaign and it was not very successful. A lot of local authorities are doing well and are protecting the poor and the vulnerable. By and large, it is Labour authorities that are letting the side down.

Bob Blackman: I congratulate my right hon. Friend on his initiatives to ease the cost of parking on our high streets. Does he agree that one of the simplest ways for local authorities to operate is to offer 30 minutes of free parking on roads outside shops, as that will revitalise our neighbourhood centres?

Eric Pickles: My hon. Friend will recall that under the previous Government, councils were urged to put up car parking charges and to make it difficult for people to bring cars into town centres. As I said earlier, I know from personal experience that the policy he suggests makes a difference. If we are to protect our town centres, particularly our smaller shops, this is exactly the kind of measure that needs to be introduced, and those councils that do not do so are failing in their duty.

Andrew Gwynne: The Secretary of State’s answer to my hon. Friend the Member for Corby (Andy Sawford) was just not good enough. When more than one in 10 small businesses now say that they spend the same or more on business rates as on rent, why will he not do more to help struggling small businesses on our high streets by implementing a cut and then a freeze worth up to £450 to the average business, as the Opposition would do?

Eric Pickles: The small business discount has trebled under this Government. Also—this is a new thing we have introduced—local authorities now have total discretion over what discount to offer, and we will come up with half the money, so frankly the hon. Gentleman’s council needs to sort itself out.

Andrew Gwynne: I’ve got two.

Eric Pickles: Get them both sorted out then.

Justin Tomlinson: I welcome the £190,000 transitional funding to Swindon borough council last week, which recognised, yet again, the innovative ways in which Conservatives are transforming public services. Does the Minister welcome the innovative steps under way in Swindon to ensure that parking facilities and charges are delivering that much-needed town centre regeneration?

Brandon Lewis: It was a pleasure to visit Swindon recently to see the great partnership work it has got going across the public sector. It was a good example of how to move forward in a new and modern way, reducing costs and getting better results for residents. To hear that it is also looking at sensible schemes to make it easy and affordable for people to park and get back into their town centre reconfirms how good a Conservative council Swindon now is.

Mary Glindon: According to Government figures, my council, North Tyneside, one of the poorest areas of the country, is facing a 2% cut in spending power this year, while the Prime Minister’s council, West Oxfordshire, one of the richest parts of the country, will have an
	increased spending power of 3%. Will the Secretary of State explain to people in North Tyneside how this is fair?

Eric Pickles: I congratulate the hon. Lady on having the dexterity to put her own council’s name into the handout, but before she arrived, that question had already been answered.

Graham Evans: Following analysis by SPARSE Rural, it has come to light that Cheshire West and Chester council received £273 core Government funding per head; that neighbouring Liverpool council received £635; and that Manchester city council received £584. Will the Minister commit to investigating whether Cheshire West and Chester council is getting the support it needs to provide the services it is bound to deliver?

Brandon Lewis: I admire my hon. Friend’s work in championing his area, and I am pleased he highlighted how Liverpool council has among the highest spending powers per head in the country. I am happy to meet him and representatives from his council, but I would point out, as we said in a debate a couple of weeks ago, that an independent report in the House of Commons Library this year showed that the funding settlement was fair not just to north and south, but to rural and urban areas.

Karl Turner: The Secretary of State likes to talk the talk when it comes to parking charges, so will he explain why three of the highest-charging councils are Tory controlled?

Eric Pickles: By which I think the hon. Gentleman means the amount of money they receive. I suspect that under any system, no matter who ran it, Westminster might get rather a lot of car parking.

Annette Brooke: What recent consideration have Ministers given to allowing authorities such as Poole, Bournemouth and Dorset to share transit sites for Travellers, given the lack of space in the conurbation and the great need for the police to be able to invoke section 62 powers when, for example, play areas become unavailable for use by local children during the school holidays?

Eric Pickles: The hon. Lady was kind enough to raise this matter with me a few weeks ago. There was some suggestion that there was a prohibition on adjoining local authorities’ sharing facilities. Having checked with the planners in my Department, I am happy to report that there is no restriction. We would very much welcome the idea of local authorities working together on this important and sensitive issue.

Seema Malhotra: What assessment has the Secretary of State made of the impact on the quality and management of private sector tenancies of his decision to abandon the national register of landlords?

Eric Pickles: One of the things we were concerned about was that we might repeat some of the mistake’s that Labour made over rent controls and the placing of a lot of burdens on landlords. The last thing we wanted was to see a great plunge in the availability of properties for tenants. So, by and large, I think that this has been a very good thing.

Duncan Hames: The Planning Minister told us earlier that local councils getting their local plans adopted was the best thing for them to do, but is that sufficient to enable them to defend those policies against the increasingly confident threats from developers to overturn them on appeal on the ground of a lack of a five-year housing supply?

Nicholas Boles: I am happy to reassure my hon. Friend that it certainly is sufficient. One of the decisions that I have most enjoyed taking in this job has been to support the decision of a local authority, which had well in excess of a five-year land supply, to refuse an application for speculative development in an area where it did not want development.

Gisela Stuart: The National Audit Office has warned that 12% of councils are unlikely to be able to balance their books in the future. Do Ministers agree with that figure and, if not, what is their estimate of the number?

Brandon Lewis: In talking to local authorities, we have found that satisfaction with them is up and that they have coped extremely well with the changes that have come through to deal with the awful deficit left by the last Labour Government.

Stuart Andrew: The Leeds core strategy is currently being examined, with the council proposing what it admits is a hugely ambitious target of more than 70,000 houses and with the developers pushing for even more. Such huge targets would see up to 80% of new homes in my constituency being built on greenfield or green-belt sites. What appeal mechanisms exist for my constituents, should the inspector approve such unrealistic targets?

Nicholas Boles: Local authorities have to assess their housing need objectively. They can sometimes exaggerate or underplay it unrealistically, but any local plan has to go through an intense process of local consultation before it can be adopted. That will give my hon. Friend’s constituents every opportunity to say what they think of those assessments.

John Cryer: The Minister will know that the Williams review made it clear that it is possible for firefighters to serve in front-line roles until the age of 60, but only on the basis of a much-reduced level of fitness. Does he agree with that assessment?

Brandon Lewis: The Williams report made it clear that if firefighters keep up their fitness throughout their careers, as they have a duty to do—alongside the fire service’s duty to have a proper programme in place—they will be more than capable of maintaining full fitness until the age of 60. I was pleased by the principles
	agreed between the Fire Brigades Union and the employers to have a process by which firefighters can maintain their fitness in a proper way, and we will keep an eye on the progress of those negotiations.

Nick de Bois: The Secretary of State has rightly introduced discretion for councils to reduce rates where possible, particularly for hard-pressed retailers. Will he please put his considerable weight behind our campaign to persuade Enfield council to make the right choices and give relief to our hard-pressed retailers by using that discretion?

Brandon Lewis: My hon. Friend makes a good point, as he did last week in our debate. He is right to suggest that councils seeking to develop their town centres, their businesses and their local economy should look into the discretion we have given them that allows them to discount local business rates in whatever manner they see fit.

Nick Raynsford: May I draw the House’s attention to my declaration in the Register of Members’ Financial Interests? Will the Secretary of State tell the House what his Department’s latest assessment is of the expected level of house price inflation over the coming year?

Eric Pickles: The Department relies on the Office for Budget Responsibility for those figures.

Andrew Bridgen: Surveys show that members of our fire and rescue service are among the most highly regarded of our public servants. Does my hon. Friend agree that the best way for them to maintain that enviable public perception is to continue to take part in negotiations and to continue to reject strike action?

Brandon Lewis: My hon. Friend is quite right. The best thing would be to have no more strike action, and for the employers and the Fire Brigades Union to deal with the issues they are discussing so that we can reach a point at which we can deliver one of the most beneficial pension schemes in the public sector.

Simon Danczuk: Rochdale council’s leadership has only postponed its decision to increase some chief officers’ pay by over 30% and intends to bring it back. Does the Secretary of State share my view that such an inflated increase in pay is not acceptable at this time?

Eric Pickles: I am embarrassed that my Chief Whip is present when I want to compliment the hon. Gentleman
	and say that he is almost a lone voice for sanity on this matter. These clearly considerable sums of money, notwithstanding the increased responsibility, are entirely wrong and I would expect the decision to be taken to a full council for a recorded vote. Let the people decide who is most sensible in running their council.

Mark Pritchard: As the Secretary of State will know, Britain’s common bird population is in decline. Will he agree to meet Britain’s new home builders to try to get them to build provisions for wildlife into future designs, thereby restoring Britain’s bird population?

Eric Pickles: I have had a number of meetings, as recently as last week, with various wildlife groups to discuss how to build into development an understanding of the needs of wildlife. My hon. Friend makes a very reasonable point about the bird population, which, outside my day job, I enthusiastically follow.

Lilian Greenwood: Tenants in Nottingham who have been forced to downsize from a two-bed social home to a one-bed private sector home can expect to pay an extra £24.83 a week in rent. The Secretary of State’s bedroom tax is a costly mess; why does he not scrap it?

Stephen Williams: We do not scrap it because we need to save money right across government. One of the major problems of implementing this policy is the lack of house building—[Interruption.] I know that the hon. Lady is from the 2010 intake and that Labour Members of that intake like to think that 2010 is year zero, but during the 13 years when some of her colleagues were in power, not enough affordable housing was built. That is the problem.

Martin Horwood: More green belt and green space is under threat in my constituency than ever before, and local people marched in protest yet again at the weekend. Will Ministers tell them why local councillors are being told to pay absolute attention to econometric models and unelected inspectors and not to local people?

Nicholas Boles: My hon. Friend knows that local authorities have to assess their housing needs and then work out how they are going to meet them. It is for local authorities to decide whether they can protect the green belt while nevertheless releasing some small portion of it to meet that housing need, but only after full consultation with local people.

UK Nuclear Energy Programme

Edward Davey: I would like to make a statement on the UK’s nuclear energy programme. I am pleased to inform the House that the Government and EDF have reached broad commercial agreement on the key terms of a proposed investment contract for a new nuclear power station at Hinkley Point in Somerset. This paves the way for the construction of Hinkley Point C—the first nuclear power station in the UK for a generation.
	Nuclear power has been part of Britain’s energy mix since the 1950s, responsible at points for as much as a quarter of our electricity, but since Sizewell B connected to the grid in 1995, no new nuclear power stations have been commissioned. Eight of the nine operational nuclear power stations in the UK will reach the end of their planned life in the next decade. So the agreement today is a demonstration of the Government’s commitment to a new fleet of nuclear power stations to replace those due to close and to protect Britain’s future energy security.
	A contract for Hinkley Point C under the key terms set out today would provide significant benefits for the UK, including up to 25,000 jobs for skilled workers over the course of construction and 900 long-term jobs during the 60-year lifespan of the plant; and a £16 billion injection into the economy, with the potential for British firms to get the majority of the work, and over £4.5 billion paid in corporation tax. EDF estimates that £100 million will go into the local economy every year during peak construction.
	Hinkley Point C would supply a stable source of low-carbon, climate-friendly power to nearly 6 million homes—nearly twice the number of homes in London—and would supply 7% of the United Kingdom’s electricity by 2025. It would reduce emissions by the equivalent of about 5% of the UK’s annual carbon dioxide emissions from energy supply compared with unabated gas-fired generation. It would increase energy security and resilience from a safe, reliable, home-grown source of electricity, reducing electricity bills by about 10% compared with a non-nuclear future. With clean-up costs included from the outset, we would be avoiding the mistakes of the past. This is good news for jobs, good news for the economy, good news for bill-payers, good news for energy security, and good news for the environment.
	This announcement also represents a significant vote of confidence in the Government’s reforms to the electricity market. We are creating one of the most attractive electricity investment markets in the world, driving an increase in low-carbon technology, and delivering the modernised infrastructure that will provide energy security and cut carbon emissions in the years to come.
	Before I go into the details of the terms of the agreement, I want to put on record my gratitude to all who have worked so hard to bring us to this point, in EDF and in the Government, including those in my Department. I specifically thank Lord Deighton and his team for the strong contribution that they have made supporting the DECC negotiating team. I believe that, working together, we have agreed the basis of an arrangement that would provide a good deal for UK consumers. It would meet the requirement for value for
	money, accord with our “no public subsidy” policy, and provide an attractive proposition for EDF and its investors, offering a reasonable rate of return for the risks that they are taking.
	Let me set out the key terms on which broad commercial agreement has been reached. Hinkley Point C would be the first nuclear power station to be built under the new system of contracts for difference that is being introduced by the Energy Bill. CfDs provide low-carbon energy suppliers with predictable future revenues, making it easier and cheaper to secure development investment and finance while protecting consumers should prices rise. The duration of the payments under the CfD for Hinkley Point C would be 35 years, which is about 60% of the 60-year operating life of the plant. That is proportionally similar to the length of the CfDs that are being offered to most renewable technologies.
	Under CfDs, low-carbon generators receive a stable price for the electricity that they sell, which is known as the strike price. We have agreed a strike price of £89.50 per megawatt-hour, fully indexed to the consumer prices index. Hinkley Point C will be the first of the new European pressurised reactors in the United Kingdom. This strike price benefits from an upfront reduction of £3 per megawatt-hour, on the basis that EDF’s subsidiary NNB Generation Company Ltd would share the “first of kind” costs of the European pressurised reactors on the Hinkley Point C and Sizewell C sites.If a final investment decision on Sizewell C were not made, the strike price for Hinkley would be £92.50.
	An agreement on those terms meets the Government’s value for money requirement. Hinkley Point C would compete with other low-carbon technologies, including onshore wind—the cheapest large-scale renewable—and with new unabated gas plant, including carbon costs, that commission in the same time frame.
	Other terms on which broad commercial agreement has been reached provide a series of protections for both sides that together represent an appropriate allocation of risks, including gain share arrangements whereby, if the developer achieves savings during construction or through refinancing or equity sales, the strike price will be reduced; operational cost review arrangements, including reviews after 15 and 25 years to reassess operating costs and adjust the strike price in either direction if necessary; “change in law” arrangements whereby the strike price would be adjusted to reflect cost changes arising from certain changes in law; and compensation arrangements in the event of Hinkley Point C’s being shut down as a result of a political decision, rather than a decision on, for instance, safety grounds.
	Separately, and for the first time ever, to deal with the clean-up costs of new nuclear, developers will be required to put money aside in a protected clean-up fund to pay for eventual decommissioning and a share of the waste management costs. This is anticipated to account for around £2 of the strike price. The Funded Decommissioning Programme would need to be approved by the Secretary of State before construction starts. All the terms are subject to contract and form the basis for further negotiation. EDF and Her Majesty’s Treasury will continue discussion regarding the terms of a potential UK guarantee. Ultimately, an investment contract would only be offered to NNBG if we consider the contract to be value for money and in line with our no public subsidy policy. Any investment contract would also be conditional on
	any required state aid clearance being obtained, and on Royal Assent of the Energy Bill. If agreed, the contract would be laid before Parliament in accordance with the Bill.
	EDF has announced today the intent of two Chinese companies, CGN and CNNC, to invest in Hinkley Point C as minority shareholders. This follows the signing last week of a memorandum of understanding on civil nuclear co-operation between the UK and Chinese Governments. The UK and China have a long-standing bilateral agreement to co-operate on the peaceful uses of nuclear power. Chinese companies have an established track record in delivering safe nuclear power over the past 30 years. Any company getting involved in the UK’s nuclear power industry does so in accordance with the most stringent regulations in the world and, on this basis, we welcome companies that can demonstrate the capability to contribute to safe nuclear power generation in the UK.
	In conclusion, I respect those who have long been opposed to nuclear technology on principle. As the record shows, I personally have had my concerns in the past, and so has my party, but I am satisfied—and I am sure Opposition Members who have had their concerns in the past are satisfied—that the safety and legacy issues relating to the new nuclear power programme are manageable, particularly with the protected clean-up fund.
	With regards to the issue of cost, I am clear: this is not a deal at any price. This is a deal at the right price. Consumers will not have to pay over the odds for new nuclear. The price agreed for the electricity is competitive with the projected costs for other plants commissioning in the 2020s, not just with other low-carbon alternatives, but also with unabated gas. As set out to Parliament in October 2010 and again in February this year, new nuclear will receive no support unless similar support is also made available more widely to other technologies. Nuclear will get no special favours
	We have a huge challenge ahead of us. With many old and dirty power stations closing down over the next decade, the capital investment required to replace that electricity generating capacity is around £110 billion between now and 2020, the largest infrastructure programme in Government. This agreement is a vote of confidence in the measures this Government are putting in place to attract investment into the system, to make the market work, and to ensure we keep the lights on. We need to decarbonise our electricity sector to meet our emissions targets and our responsibilities to the next generation, and we need a revolution in home-grown energy generation to protect bill-payers from price rises caused by volatile world gas markets.
	Nuclear power is a key part of the Government’s energy security strategy. This announcement is another step on the path to realising a safe and dependable source of clean power for millions of homes, jobs for thousands of skilled workers, a boost to the economy and reductions in electricity bills over the long-term. I commend this statement to the House.

Tom Greatrex: As the Secretary of State is aware, there have been severe disruptions on the railway line today between
	Doncaster and London, owing to a power failure, which have prevented my right hon. Friend the Member for Don Valley (Caroline Flint) from being here—she sends her apologies to the House, Mr Speaker.
	I thank the Secretary of State for giving me early notice of his statement and congratulate him on making it back from Hinkley this morning looking slightly less damp and dishevelled than he did earlier. At the outset, let me make it clear that we support new nuclear power in Britain as part of a balanced, diverse and lower-carbon energy mix. Of course, we will look in detail at the agreement, and those aspects of the agreement yet to be concluded, but in principle we believe that nuclear power is safe, and that it contributes to our energy security, reduces our carbon emissions and makes us less vulnerable to the vagaries of wholesale gas prices.
	Today, I want to ask the Secretary of State about three aspects of his statement, the first of which is the very important one of value for money. He has announced a strike price of £92.50, of which £3 will be shared as “first-of-a-kind” costs with Sizewell C, should that development go ahead. Can he explain how that figure was arrived at, and why he believes it represents good value for money for consumers? Will he also confirm that any change to an investment contract will be published, and that any change which results in an increase in cost to consumers in the view of the panel of independent experts will be classed as a “varied investment contract” and therefore laid before Parliament for debate? EDF has also said that its £16 billion budget included a contingency fund. If that fund is not used, or if costs underrun, what mechanism will there be to ensure that compensation goes to consumers, rather than to the general Treasury pot?
	Secondly, let me turn to the impact of the announcement on our environment, on the local community and for the economy. The Secretary of State will be aware that the Energy Act 2008, passed by the last Labour Government, means that before consents for new nuclear power stations are granted, the Government have to be satisfied that effective arrangements exist, or will exist, to manage and dispose of the waste they will produce. In January, although Copeland and Allerdale borough councils were in favour, Cumbria county council voted to withdraw from the process to find a host community for an underground radioactive waste disposal facility. I understand that his Department has started a new consultation exercise to find a host site, so is he satisfied that the arrangements to manage and dispose of the waste produced at Hinkley Point C are in place?
	There is also agreement across the House that communities that host nationally significant infrastructure should be compensated. In July, the Government announced a package of community benefits, but those come into force only when the plant is operational and not during the construction phase, when disruption is likely to be greatest. What consideration has the Secretary of State given to the Select Committee’s recommendation, which I know is shared by Sedgemoor district council, to extend community benefit to the construction period?
	The Secretary of State also mentioned the wider economic benefits of the investment. We share his desire that today’s announcement will help to create a strong British supply chain and secure highly skilled engineering, construction and operating jobs. Last week, the Government signed a memorandum of understanding allowing Chinese
	companies to take a minority stake in nuclear developments in Britain. Given the nuclear expertise that exists in this country, can the Secretary of State tell the House what provisions were made to allow British firms to advise on and be involved in nuclear build in China?
	Thirdly, we hope that today’s announcement is the first in a series of new nuclear projects in Britain, so let me finish on the lessons of these negotiations and today’s agreement. Today’s announcement is subject to EU state aid approval, so will the Secretary of State tell the House whether he has received any indication from the Commission about whether approval is likely to be granted and in what time scale? What are the Government doing to ensure that other potential nuclear sites are developed? Does he also accept that today’s agreement shows that long-term certainty is what really matters to unlock the investment we need, not allowing overcharging to continue now? The Government say that they cannot freeze electricity prices for 20 months, but he has just set them for 35 years for companies producing nuclear power. So does he therefore further accept that when on 24 September he said that our 20-month price freeze proposal would put “investment in doubt”, today’s announcement shows him to have been completely wrong?
	Finally, as this comes on the same day as npower became the third big energy company to announce another price rise, and in light of the potential costs of this agreement, does the Secretary of State now accept that it is all the more crucial that we reform the retail energy market so that it is clear, fair and transparent, and so that consumers can have confidence that prices as well as investments provide value for what is, after all, their money?

Edward Davey: I am grateful to the hon. Gentleman for his response and, of course, we understand that the right hon. Member for Don Valley (Caroline Flint) has been detained through no fault of her own. I think the power failure shows that we need this investment in our economy.
	I welcome the support of the hon. Gentleman and of the Labour party. Let me go through his questions. He asked first about value for money and how the figure was arrived at. We have had a huge amount of negotiations. The hon. Gentleman will have noticed that many people thought that we would end up with £100, £97 or £95 per megawatt-hour. We have done a lot better than that—we have got the figure under £90, and I do not think that anyone thought that we would do that. We have got a good figure through hard, tough negotiations.
	As for the hon. Gentleman’s question about value for money tests, he will know that as we have said on the record we have compared what we have achieved with the price of low-carbon generation and gas plus the carbon price. We believe that we will be able to show, both now and when we sign the final investment contract, that we have met that test. He asked whether any changes in the future would be published and I am sure that that will happen. It is very important that Parliament is kept abreast of those big changes.
	The hon. Gentleman asked what would happen if the construction costs, including the contingency fund, were not used. If EDF and NNBG make savings on the construction plan, as projected, the good news is that
	we have negotiated a gain-share for the consumer. The consumer will have no pain-share: if the construction costs go higher, that risk is taken by the developer, by EDF, but if the construction costs are lower, the consumer will benefit. That has not happened before, and it is a welcome protection for the consumer.
	The hon. Gentleman rightly asked about waste. I can tell him and the House that I am satisfied that arrangements are in place to deal with the nuclear waste, both in the interim and in the long term. He mentioned the consultation and that is part of that process.
	The hon. Gentleman asked about community benefits and he is right that the package we announced last July comes into play only when the power station is operational. We have heard the Select Committee’s recommendation and, although I cannot prejudge our response to it, we will listen to it carefully. I will only say that EDF is already benefiting the community, investing in skills and young people in the area, and economic benefits will flow during the construction phase. EDF has already said that during the peak construction £100 million will go into the local economy every year. The local community will benefit even before the community benefit package is in place.
	The hon. Gentleman asked about the memorandum of understanding and how it relates to UK companies going to China. He is absolutely right: the purpose was to ensure that UK nuclear companies, and there are many, get some benefits from exports and from working in China and other markets. That is important.
	The hon. Gentleman made an important point about state aid. Of course, we were in touch with the Commission before the notification. Now we have formally notified, we will continue that contact. The Commission does not tell a member state ahead of notification whether it will grant approval—of course it does not—and it will not commit itself to a time scale. I am pleased that Commissioner Almunia has told us that a team will be in place in a timely fashion and will treat the issue with the priority it deserves.
	The hon. Gentleman went on to ask how other nuclear sites are doing. I could go into a lot of detail, but let me simply give him one example. He will know that Hitachi bought the Horizon site and its nuclear reactor design is in the generic design assessment phase with the Office for Nuclear Regulation. Hitachi wants to proceed with its investments and, in due course, will enter negotiations.
	The hon. Gentleman wanted to relate today’s deal with Labour’s price fix con. He was trying to argue that Labour’s price fix con must be possible if we can offer a fixed price for nuclear for 35 years. Once again, the Labour party shows its economic illiteracy. Given that the Leader of the Opposition did my job, he ought to know that even if a part of the electricity generation mix has a fixed price, the majority of generating costs remain variable and will be for some time. The fact that generating costs and wholesale costs are variable, often unpredictably so, means that prices sometimes have to change to avoid firms’ going bust. The fact that the Opposition’s energy price fix con cannot address this is bad news for consumers, bad news for competition and bad news for investment. It is genuinely worrying that the Opposition cannot see that.
	Finally, the hon. Gentleman referred to Npower’s decision today, which is extremely disappointing. I would say to Npower’s customers, as I have said to British Gas customers: thanks to this Government there is a choice. Under the previous Government, who created the big six, there was not a choice of independent suppliers. There are now 15 independent suppliers taking on the big six. There is a real choice now—real competition—and that is a new development. It was not the case under Labour. So we are reforming the market in the Energy Bill, creating competition and getting a much better deal for the consumer. This is a good deal for the consumer. The only thing that would not be are the Labour party’s policies.

Ian Liddell-Grainger: I thank the Secretary of State and my right hon. Friend the Prime Minister for coming this morning to see exactly what is going to happen at Hinkley C. This is very good, not only for my constituents, but for the United Kingdom. I have with me the prospectus for Sedgemoor district council, which the Opposition spokesman mentioned. We are open for business and this decision is important for upping skills, upping engineering and upping inward investment, not just for Bridgwater and West Somerset, but for the United Kingdom. Does the Secretary of State agree that today is a very good day for the British economy and for nuclear power in Britain?

Edward Davey: I pay tribute to my hon. Friend, who has championed this investment over a number of years. I saw on my rather wet visit this morning to Hinkley Point C that he is well known on the plant. The fact that he is focusing on the skills agenda, and that the Prime Minister and I met a lot of young apprentices who are looking forward to working at Hinkley Point C for many years, shows the potential for this development—what it means for the community that my hon. Friend represents, the wider economy and the British economy. It is indeed a good day for the British economy.

Peter Hain: Even accepting the case for Hinkley, why is the Secretary of State not giving in-principle support to the Severn barrage, which would deliver clean green energy at half the price, at a similar strike price, over three to four times the lifespan of Hinkley and with three times the number of jobs? I just do not understand it.

Edward Davey: I am grateful for the right hon. Gentleman’s persistence in this issue. He knows that I have met him. I have looked at the figures that have been produced by those who want to see a Severn barrage created. It would not be at half the price; it would probably be at double the price; it is extremely expensive. No one would be more delighted than I if we could see tidal power coming in the Severn. I believe it will come, but the price will have to come down because we must protect the consumer.

Tim Yeo: Does my right hon. Friend agree that this news has been very long awaited and is therefore all the more welcome for that? Does he also agree that the prospect of Chinese investment in the nuclear industry in this country is extremely welcome, not least because China entirely shares Britain’s
	objectives of trying to reduce its dependence on fossil fuels for electricity generation, and also because China recognises that the safety and inspection regime of the nuclear industry in this country is the most stringent in the world?

Edward Davey: I am grateful for my hon. Friend’s support in this matter. He is right to make it clear that Chinese investment into Britain, and in this case into our electricity supply system, is very welcome. We already have it. There are billions of pounds of Chinese money invested in the UK’s electricity industry and in our wider industry. I talked to EDF today, which has been working in China for more than 30 years. EDF has been partnering Chinese nuclear firms for a long time, so this partnership ought to be welcomed in the UK.

Adrian Bailey: I welcome this announcement, but the departmental press release said that up to 50% of the work would be available for employment in this country. Can the Secretary of State clarify whether 43% will not be available? Given the rundown in capacity in the construction industry and the shortage of our engineers, can he say what is being done to maximise the employment potential?

Edward Davey: I am grateful to the hon. Gentleman for his welcome. He is right that we have negotiated a deal so that 57% of the value will go to UK firms, ensuring that they can get the benefit and develop their skills and that UK employees can be a big part of the project. We would have liked the figure to be higher, but unfortunately not a lot has happened in the nuclear industry for many years. I wonder whether Opposition Members might like to explain why that is. This Government have looked forward to ensure that there will be a better future for British nuclear firms, not only as a result of this deal, but because earlier this year my right hon. Friend the Secretary of State for Business, Innovation and Skills and I published an industrial strategy for the UK’s nuclear industry, looking at all aspects, so that British firms and British people can benefit as we develop clean, low-carbon nuclear power in this country.

Anne Main: I welcome the statement and, in particular, the fact that there will be a degree of protection for the environment because the nuclear industry will be responsible for the clean-up. Will the Minister give a little more detail on how much will be taken in the protection fund and whether there will be Government oversight of its administration?

Edward Davey: My hon. Friend makes an important point. One aspect of the arrangements that I believe will be particularly welcomed by consumers and taxpayers is that the operator will have to start meeting the clean-up costs from day one of generation, which has not been the case in the past. Two thirds of my Department’s budget is spent meeting the decommissioning costs of past nuclear power stations that have long finished generating electricity. That was a scandal and past Governments failed. This Government have learnt the lessons and ensured that the decommissioning costs are up front. There will be oversight of how the fund is operated to ensure that we protect future generations and taxpayers.

Caroline Lucas: A 35-year contract that locks UK consumers into paying around double the market price for power does not sound like a good deal to me. If the Minister genuinely thinks that it is fair, will he agree to full examination of the terms by the National Audit Office? He talked about the developers being required to share waste management costs, so can he tell us how big the share will be that the public will have to pay for and what the expected cost of that additional subsidy will be? Finally, since there is a cap on the costs that EDF would have to pay for managing the radioactive waste, can he confirm that if those costs increase above the cap, the British taxpayer will have to pay for any top-up costs, however high they escalate?

Edward Davey: I thank the hon. Lady for her question. She might have missed it, but the NAO put out a press release earlier today stating that it will be looking at the details of our commercial agreements, which we welcome, because we are very happy for our proposals to be scrutinised. We have encouraged transparency in this because we believe that we can make our case. Unlike in previous generations, when the costs were not transparent, we are prepared to be transparent. She might be surprised, because she probably did not realise that the NAO would be looking at this so early. She asks about the public share of waste management. The truth is that the public will have to shoulder a large amount of the cost of nuclear waste, because a vast amount of nuclear waste that has to be dealt with is from the past, from the first two generations of nuclear power stations and from the military’s nuclear programme. That was paid for by the taxpayer and no provision was made for cleaning it up. That is why this deal is different and so good for the taxpayer.

Gordon Birtwistle: As one Liberal Democrat who supports nuclear power and always has, and who understands the need for mixed energy provision, may I ask my right hon. Friend to advise me on whether this will secure our electricity supply in future? Also, does he agree that this should have been done 10 years ago, because we have been pushed to the brink by the previous Government?

Edward Davey: I strongly agree with my hon. Friend. I will make two points in response to his comments. First, 7% of Britain’s electricity needs will be secured when the two reactors are working at capacity, which is expected in 2025. That is a huge bonus for our long-term plans for energy security in this country, something that was not happening before the coalition Government came to power. Secondly, on his point about the Liberal Democrats, our party changed its policy at our recent conference in Glasgow, and I will explain to the House why we did that. The reasons are similar to those that led me to change my view. Climate change is a huge challenge for our country and for the world. Some people believe that we can combat it simply by using renewables and energy efficiency, but I do not believe that we can. I believe that it is such a serious threat to our world that all forms of low-carbon electricity need to be used. I urge environmentalists in the House to reflect on that.

Michael Meacher: The strike price of £89 per megawatt-hour is twice the current market rate and more than twice what
	the Department of Energy and Climate Change was confidently predicting just five years ago. If that were inflation proofed over the whole 35-year period, as the Secretary of State has said, will that not end up costing taxpayers more than £200 per megawatt-hour by the end of the period? What proportion of the loan guarantee for the debt to build two £14 billion reactors is also going to be backstopped by the British taxpayer? Will not the project end up as a colossal financial disaster for the UK taxpayer?

Edward Davey: I think the right hon. Gentleman has been saying that for a number of years. He was predicting a much higher strike price, but we have a very good strike price. Let us be clear to the House, because the issue is important. EDF and its co-investors will not receive a single pound, and consumers’ bills will not be touched, until the power stations start generating. The earliest expected time for that will be in 2023—10 years’ time. I have to say to the Labour party that the world will be very different in 10 years’ time, and future electricity and energy prices will be very different. I am pleased that Labour party Front Benchers have welcomed the proposal. Clearly, they support what we have done on prices, and people will have noticed.

Several hon. Members: rose—

Mr Speaker: Order. Approximately 45 Members are seeking to catch my eye on this extremely important matter. I am keen to accommodate as many of them as possible, but if I am to do so, brevity will be of the essence. That can now be exemplified by a man of great experience and long service in the House of Commons: the right hon. Member for Hitchin and Harpenden (Mr Lilley).

Peter Lilley: I am grateful, Mr Speaker.
	Can my right hon. Friend confirm that the reason we are dependent on foreign companies to build these nuclear power plants is that the last Labour Government sold off Westinghouse to the Japanese and then sold British Energy to the French when the current Leader of the Opposition was Secretary of State for Energy and Climate Change?
	Given that the one area in which we retain nuclear expertise is in building small nuclear generators, will my right hon. Friend look closely at the proposals put forward by the noble Lord Ridley for building small nuclear reactors in future, to provide electricity and possibly an export market as well?

Edward Davey: My right hon. Friend makes some pertinent and relevant points. I am not aware of the noble Lord Ridley’s proposal, but I am aware that Rolls-Royce has been doing a lot of research and development into small modular nuclear plants, and clearly that is extremely interesting. It shows that there are British nuclear firms with skills and expertise, and they are welcoming our proposals today.

Pat McFadden: On the issue of the supply chain and its capacity to do the maximum amount of work under today’s announcement, does the Secretary of State regret undermining the UK nuclear supply chain by withdrawing
	the loan to Sheffield Forgemasters? That limited this country’s capacity to do nuclear work domestically and for export. In the light of today’s announcement, does that not look like a stupid, short-sighted decision?

Edward Davey: The right hon. Gentleman is out of date. The Government have been giving support to Sheffield Forgemasters.

John Redwood: I welcome the decision to have more power capacity, which we greatly need. However, given the generous financial terms to the investors, did the Secretary of State consider the possibility of reserving some part of the financial investment and provision of capital for British interests? I am sure that many of them would like those sorts of returns.

Edward Davey: First, 57% of the value of this project will go to UK firms, and I hope that the right hon. Gentleman welcomes that. I do not believe that these terms are generous at all. We have had hard negotiations to get them down, and EDF realises that. Some of the benefits of the deal we have negotiated need to be held up in the headlights. There is the construction gain share, so that if the construction costs are lower, the consumer gains. If there is a refinancing by the investors in 10 years’ time from which they make a lot of money, the consumer will gain from that refinancing. That never happened with private finance initiative deals when Labour was in power; rather, the taxpayer lost out. We have the refinancing gain share for the consumer, and I doubt that would have happened if that lot had been in power.

Barry Gardiner: How much of the £16 billion of construction costs will the developers of Hinkley Point C be able to offset in tax reliefs and capital allowances? Does the Secretary of State consider it ironic that EDF has insisted on an insurance clause against his own party’s future policy by stipulating that the strike price will rise to reflect any future tax on or shutdown of the industry? While he is at it, will he explain why the strike price for the Flamanville sister plant in France is only £64—some 30% of the £92.50 he has negotiated?

Mr Speaker: I think that the hon. Gentleman should seek an Adjournment debate on the matter; in fact, on reflection, I think he has already had it.

Edward Davey: I said in my statement that the UK taxpayer can expect to gain £4.5 billion in corporation tax as a result of this, paid for by the investors, but it is even better than that; I have some very good news for the hon. Gentleman. Because we wanted to make sure that these companies could not rearrange their tax affairs after the deal and somehow reduce the tax funds that we were expecting to come to Her Majesty’s Treasury, we undertook a very unusual clause in our deal to make sure that, should they do exotic tax deals to shelter their tax liabilities, the strike price will reflect that and be adjusted downwards. That is how far we have gone to make sure that the taxpayer and the consumer are protected.

Sheryll Murray: I am sure that my constituents and other people in Cornwall will welcome this because it will stop us having to have
	another 6,000 wind turbines to generate the same amount of energy. Does my right hon. Friend agree that this will benefit the countryside?

Edward Davey: I was agreeing with a lot of what my hon. Friend said. I say to her and to all right hon. and hon. Members that we need a diverse energy mix. If we go for one form of electricity generation, that is far too risky. We need nuclear; we need renewables in all their shapes, forms and sizes; we need carbon capture and storage; and we need energy efficiency. The electricity security challenge is massive, and we need every aspect. The low-carbon challenge is massive, and we need everything to be low-carbon. Onshore wind has a role to play along with nuclear.

Joan Walley: Given that the Government have stated that the two really important conditions are value for money and no public subsidy, will the Secretary of State set out how all the details of the negotiations will now be made available to the National Audit Office so that Parliament can scrutinise them? If there is an overrun in construction or time delays, how will the £10 billion loan guarantee work? Will it be a taxpayer grant or a grant for Chinese and other companies?

Edward Davey: I have already made it clear to the House that this is going to be the most transparent deal ever. When my ministerial colleagues discussed the issue with Labour Front Benchers during the proceedings on the Energy Bill, we did not undertake to do what we are doing today. We are being more transparent than we promised. We have said that when the final investment contract is signed, we will publish it, and we have committed to that in the Bill. There will be very evident transparency not only on value for money and no public subsidy but an awful lot more. Of course, because we have not concluded the commercial negotiation, there are one or two commercial issues that we will not be publishing at this point, but there will be an awful lot more to see when we come to signing the final investment contract. As for cost overruns, I have made it clear to the House that by negotiating a tough deal, we have ensured that the consumer is protected from those. That did not happen in the past. We have seen cost overruns in nuclear projects time and again, and I was determined that that would not happen this time.

Alistair Burt: As the former secretary to the Conservative party Back-Bench energy committee of 1983, may I welcome this long-awaited announcement of a welcome increase in the United Kingdom’s energy mix and security? Will my right hon. Friend say in particular how he intends to use this boost to the United Kingdom’s nuclear expertise abroad to add to our reputation, which is much enhanced by our skill in this particular area? Also, although he is welcome to his views on onshore wind, does he agree that some areas, such as north Bedfordshire, have done their bit and there need not be any new decisions made to add to our wind-power capacity?

Edward Davey: My hon. Friend needs to address his last point to his local planning authority, because he knows that I do not take those decisions.
	The nuclear opportunity to UK companies is, indeed, very big. Many of our companies are already partnering with nuclear companies from other countries to bid for nuclear deals in, for example, the Czech Republic and Turkey. Companies such as Rolls-Royce, Babcock and AMEC are very active in the international sphere, and I think that this project and our ambitions for the nuclear industry supply chain will only further their ambitions.

Stewart Hosie: The Secretary of State said that there would be no public subsidy, but this project will be eligible for consumer-funded payments —subsidies by any other name—of up to £1 billion year, and not for the 15 years offered to renewables, but for 35 years, which is a scandal. Will he confirm that the total cost of this project—£43 billion—is comparable to the entire energy technology budget between now and 2021, and that this single project risks squeezing out domestic energy technologies in favour of imported and expensive nuclear technology?

Edward Davey: I am afraid the hon. Gentleman could not be more wrong. Not only do I not recognise his figures, but I am surprised that he is so confident as to be able to suggest them. I admire those in and outside the House who are able to estimate how much this is going to cost, because they clearly know more than me, my officials and the industry. They are clairvoyants, because they know what energy prices will be in 30 or 40 years’ time. I am in awe of the hon. Gentleman. This is a good deal for the consumer and for the economy, and, given that it also delivers on our low-carbon agenda, he ought to welcome it.

Gerald Howarth: I welcome my right hon. Friend’s Damascene conversion, which is growing by the minute, and this bold, long-term decision, which stands in stark contrast to 13 years of indecision by the Labour party that put security of supply in this country seriously in jeopardy.

Edward Davey: I am grateful for my hon. Friend’s remarks, but I say to him gently that I hope everyone on the Conservative Benches will also understand why I have changed my mind: it is because of the threat of climate change. I hope that all Conservative Members will look at the Intergovernmental Panel on Climate Change report—its fifth annual assessment—and accept the scientific consensus of 269 experts from 39 countries. The evidence that climate change is happening and that man is responsible for it is overwhelming and we need to take action on climate change. If I am prepared to change my views on nuclear, I hope that some on the Conservative Benches are prepared to accept that climate change is something we have to face up to.

Alan Whitehead: Does the Secretary of State intend to present to the House the arrangements he has arrived at in the form of the varied investment contract, as set out in the Energy Bill? If so, will he set out the terms under which the strike price can be varied upwards under the varied investment contract, as well as the terms of the forfeiture of such a contract should the subject to it not deliver within the window set out by the contract when it is signed?

Edward Davey: I think I followed that question. The hon. Gentleman is an expert in this area and his points are important. I said in my statement that there will be operation expenses reopeners at 15 years and 25 years, but they will be symmetrical, so if operation costs have reduced, the strike price will come down, and if they have increased and that can be proven, the strike price will go up. That is the only way to manage such a contract over such a long period; otherwise the initial strike price would have to be much higher in order for the investors to undertake those risks. We will be transparent, so over the coming weeks and months the hon. Gentleman and the Select Committee will be able to look in detail at many of the issues he has raised.

Stephen O'Brien: As a former industrialist who has long argued for the renewal of our fleet of nuclear power stations, I warmly welcome this agreement between the parties. It will provide constant base load electricity generation, which is necessary for competitiveness. I hope that many other areas will shortly follow suit, not least the north-west. Bearing in mind the reasons for his “conversion”, as he put it, will the Secretary of State try to persuade our European partners that this low-carbon method of producing energy should count towards our renewables obligations?

Edward Davey: I am grateful for my right hon. Friend’s comments. Britain is working with a significant number of like-minded member states that wish to develop their nuclear programmes. I believe that nuclear needs to be seen as a low-carbon technology in the European debate, because it will be critical to meeting our climate change objectives in the UK, Europe and the world. I recommend to him and to other right hon. and hon. Members the book by the chief scientist in my Department, “Sustainable Energy—Without the Hot Air”, which is something that this House would benefit from.

Derek Twigg: Towards the end of the statement, the Secretary of State said that
	“we need a revolution in home-grown energy generation”.
	Given that the station is being built by the French and the Chinese, that was an interesting comment. What steps are the Government taking to ensure that British companies can build power stations?

Edward Davey: Earlier this year, my right hon. Friend the Secretary of State for Business, Innovation and Skills and I published an industrial strategy for the nuclear industry in the UK to do just that. On the home-grown point, the danger is that if we do not produce energy in this country, whether through nuclear or renewables, we will be increasingly dependent on imports of gas from the other side of the world. That would leave our economy vulnerable to the supply of that gas and to vulnerable wholesale gas prices, which could hit consumers badly. That is why we need more home-grown, low-carbon energy.

Tony Baldry: Will my right hon. Friend confirm that at £89.50, the strike price for Hinkley will be lower than the strike prices for offshore and onshore wind?

Edward Davey: My hon. Friend is right about the comparison with offshore wind. We hope to reduce the costs of offshore wind over the next few years. I hope that in the 2020s, as it grows to be a significant low-carbon generating sector, offshore wind will be much more cost-competitive. We are having to subsidise it as a new immature technology. The costs of onshore wind have come down significantly. Although the nuclear deal is competitive, onshore wind is a very cost-competitive, low-carbon generator in comparison with nuclear. People often think that onshore wind is not cost-competitive, but when one considers the carbon costs, it is becoming very cost-competitive.

Jamie Reed: It has taken many people many years to get the policy to this point. I warmly welcome the announcement that has been made by the Secretary of State. Will he join me in acknowledging the contribution of people such as the late Malcolm Wicks, a former Member of this House, in getting the policy to this point? Does he also share my view that we need urgently to develop the other sites that have been identified for nuclear development in this country? Will he consider publishing a critical path development strategy to establish how and when those other sites will be developed?

Edward Davey: It is right that the hon. Gentleman mentions the late Member of this House, Malcolm Wicks. He was respected on both sides of the House. I believe that he was an Energy Minister twice. He was respected by officials in the Department who worked with him. He played a role in this policy and it is right to mention him.
	The hon. Gentleman also asked whether I would publish a new plan. We already have a lot of plans involving a lot of nuclear power stations. I do not want to anticipate what will come next quite yet, but we are on the way.

Tobias Ellwood: May I join other Members in welcoming the Government’s determination to make up for a decade of neglect by the Labour party and to ensure that we can keep the lights on? Will the Secretary of State confirm that there is a lot of international interest in Britain’s nuclear energy programme? However, will he also confirm that no matter which country takes an interest, it is the National Grid that will have the ultimate responsibility for any new nuclear reactor?

Edward Davey: I am grateful for the hon. Gentleman’s question, and he is right to say there is a lot of international interest, as I saw on recent trips to Korea, Japan and China. Right hon. and hon. Members will also know about interest not only from France, but from north America, including Canada, and Russia. I am not sure, however, that that international interest all depends on National Grid because I think a lot of the work depends on my Department and the Government. National Grid has a critical role, but the negotiations were done by my Department.

Meg Hillier: Earlier, the Secretary of State reflected on why there has been a delay in building new nuclear. When I was shadowing his position, I was approached by nuclear companies who asked about political commitment in
	this country. I gave resounding support from the Labour party, so I think the dithering came from his side. While he talks about a 35-year plan and a power station that will open in more than a decade, does he still advise my constituents to put a jumper on when they cannot pay the bills?

Edward Davey: The hon. Lady demeans herself because she knows I did not say that on “Newsnight” recently. More importantly, she is not taking responsibility and neither is the Labour party. She may not know this, but this is the first time the Liberal Democrat party, or its predecessor, has been in power in peacetime for about 90 years, so blaming my party for not delivering on nuclear power takes some cheek.

Damian Collins: I welcome today’s statement and hope this is the start of a series of investments in new nuclear power stations. Does the Secretary of State agree that we should keep an open mind on breakthroughs in new technology, and particularly smaller reactor types that might suit sites such as Dungeness in my constituency?

Edward Davey: The hon. Gentleman is a doughty champion of Dungeness, and it may have a role to play in the future. I cannot see beyond current plans, but perhaps some of the new technology we have heard about could be part of such a role, although he knows I cannot commit to that today.

Jim Cunningham: What the Secretary of State has announced is for the future, but his energy policy for today is a shambles. He is recommending that people either wear pullovers or shop around, but if they shop around they find energy prices rising by about 10%. What will he do about those cartels? He should not blame the previous Labour Government because he is responsible now.

Edward Davey: We are responsible, and we are sorting out the cartels that we inherited from the previous Government. The big six were created by the Labour party’s failed reforms of the electricity market, but because we have been deregulating and improving competition, the hon. Gentleman’s constituents have more choice. He does his constituents a disservice if he does not explain that they no longer have to stick slavishly to the big six, and that there are 15 independent suppliers. I thought he would want to help his constituents by recommending that they shop around.

Charles Hendry: I congratulate my right hon. Friend and his colleagues and officials on this historic and incredibly important achievement. Taken together with the more than doubling of renewable electricity generation in this country since 2010 and the huge interest in developing carbon capture and storage, does this nuclear renaissance not show that the market reforms he has championed have been exactly what investors have required to invest in the plant that our long-term energy security requires?

Edward Davey: My hon. Friend is right to say that the market reforms that the coalition Government have championed are already bearing fruit. He points to the fact that renewable energy has doubled under this
	Government, and that we are seeing a push forward on carbon capture and storage and now nuclear. I must say, however, that he played an important role in all of that.

Dave Watts: Is it clear from today’s announcement that the British energy industry is broken and that we need a change? Why is all the risk being taken by the public and the Government, and none by EDF?

Edward Davey: The hon. Gentleman is wrong on every count. We are fixing the broken market we inherited because we have a lot more competitors, not just in supply and retail, but in wholesale. A lot more independent generators have been coming in, which he should welcome. The idea that all change has stopped—we are the Government changing the electricity market—[Interruption.] He asks about risk, but the risks have been transferred to EDF, not the consumer.

Dave Watts: indicated dissent.

Edward Davey: It is absurd for the hon. Gentleman to shake his head. This is the first deal, I think probably in the world, in which we have managed to prevent the consumer from taking on any construction risk. He ought to welcome that.

Mike Weatherley: I have grave concerns about today’s announcement. The cost of clean-up for existing nuclear is more than £100 billion. Will my right hon. Friend assure me and the House that such costs will not be borne by future generations? What contingency plans will be in place should EDF not exist in 35 years’ time?

Edward Davey: My hon. Friend makes an important point. The cost of decommissioning is one reason I was concerned about nuclear power in the past. As I have told the House, two thirds of my Department’s budget is spent on decommissioning past nuclear power stations. It was a scandal that we had to clean up the mess of previous Governments who failed to tackle decommissioning costs. That is why this deal is so different from what has gone before. The decommissioning costs are included in the strike price we announced. EDF and its partners must provide, from day one of generation, for a funded decommissioning plan, which will be independently overseen. I can therefore tell my hon. Friend that we have made a big step forward in dealing with decommissioning.

Paul Flynn: Without the deal, EDF faces bankruptcy, with £38 billion of debt and only two contracts: the first, at Flamanville, is three years late and more than three times over budget, rising from £3 billion to £8 billion; and the other, in Finland, is twice over budget and seven years late. How does the Secretary of State expect EDF to do at Hinkley what it has never done before, namely deliver on price and on budget?

Edward Davey: The hon. Gentleman is not as well informed as he might be on EDF contracts. For example, it has a contract in China, where, with the Chinese, it is building
	a nuclear power plant at Taishan. That is on budget and on time. I tell him gently that EDF has a huge amount of experience and is a good partner for the UK. Unlike the deals he mentions, we have ensured that the consumer is protected from construction cost overruns. He ought to welcome that.

Phillip Lee: I am a nuclear enthusiast and broadly welcome the details of the plan, but I harbour national security concerns in respect of foreign state involvement. In the light of that, will the Secretary of State say whether a UK public sector pension fund would be able to invest in a Chinese nuclear reactor? If not, why does he believe that the Chinese Government would not be interested in receiving such an investment in their critical energy infrastructure?

Edward Davey: My hon. Friend is aware that my right hon. Friend the Chancellor recently signed a memorandum of understanding with the Chinese Government to ensure that we can work together more in the area of civil nuclear power. That means Chinese companies investing in the UK and British investors and companies investing in China. I will not say that the markets will open overnight—that would be unrealistic—but we are moving into a new era in which we can work with the Chinese and other foreign states.
	One odd thing about the debate is that a Hong Kong Chinese company owns UK Power Networks, which owns three of our district network operating companies, including London. So the electricity supplies to London—the cables and the networks—are owned by a Chinese company. I have not heard questions on that at Department of Energy and Climate Change oral questions. Perhaps I will in future, but the evidence—the lights have stayed on—suggests that people should not worry.

Mark Hendrick: The Secretary of State says that the deal is not a deal at any price. How can he anticipate that the decommissioning, clean-up and waste disposal costs will be around £2—that is what he said in his statement—when there is no identifiable or accepted disposal site in this country, and when the project is on a scale this country has never seen before?

Edward Davey: There is already a lot of decommissioning expertise in this country because we are spending so much money on it. We have a lot of technology in that area. If we build those costs into the strike price early on—[Interruption.] If the hon. Gentleman listens, I will answer his question. We can do it for £2 early on, from day one of generation, because we are putting money aside over a 60-year period of generating. I believe the funded decommissioning plan lasts for 40 years—[Interruption.] I am getting nods, so I must be right. However, the plant is expected to generate electricity for 60 years. It is rather like a pension fund. If we make sensible provision early on, the costs can be kept very low.

John Whittingdale: Will the Secretary of State confirm that it is the Government’s ambition that this should be the first of a series of investments in new nuclear generation? What are the Government doing to attract other potential investors who may be
	persuaded to look at designated sites, such as Bradwell-on-Sea in my constituency, which is already a model of successful decommissioning?

Edward Davey: Yes, we envisage a series of new nuclear power stations being built. I and other members of the Government have, on various trips, engaged in commercial diplomacy, meeting potential investors and nuclear companies in other countries, and there is huge interest in the nuclear market. When German companies RWE and E.ON put the Horizon consortium on the market everyone said, “This is a disaster. It shows that nuclear policy isn’t working.” Far from it. We had huge interest from around the world. Hitachi ended up paying nearly £700 million for the privilege of having the consortium, even before it had got its reactor design through the generic design assessment. That is the level of interest and the vote of confidence in our policy.

Jonathan Edwards: Should energy transmission infrastructure developments, which accompany such energy generating developments as this, be constructed underground?

Edward Davey: The detail of transmission infrastructure is sorted out by National Grid under legislation passed some time ago. In many areas, particularly in areas of rural beauty, people want more undergrounding of cables. The hon. Gentleman will know that that can be expensive. There are a number of inquiries at the moment, not least in Wales, and it would be inappropriate for me to comment on them.

Martin Horwood: Will my right hon. Friend share with the House complete details of the compensation agreement he mentioned, which, on the face of it, might be interpreted as an attempt to bind this Parliament’s successors, financially if not politically, and prevent a future democratic decision to abandon nuclear?

Edward Davey: We will of course be publishing a lot of these details, but I have to say to my hon. Friend that, given the experience in Japan and Germany, it is not unreasonable for a company wanting to invest in nuclear to have some protection against a future Government changing the policy completely. I think that if he was a shareholder of a company wanting to invest in UK nuclear, he would be looking for that sort of protection too. In many ways, I regret that we have had to give that protection, but it was a reasonable request and I think it would have been a showstopper if we had not been able to meet it.

Luciana Berger: I listened carefully to the Secretary of State on where future savings could be made, but if the reference price comes in below the strike price, EDF will make even more than its 35-year guaranteed return. The Government rejected Labour’s proposals to ensure that any difference between the reference price and strike price would be passed back to consumers. How will the Government ensure that hard-pressed bill payers get the best deal for their energy?

Edward Davey: We have started that process by our announcement today. I am not sure what strike price the hon. Lady and the hon. Member for Rutherglen and
	Hamilton West (Tom Greatrex) mentioned in the Bill Committee proceedings, but few people thought we would achieve the strike price we did. What she fails to mention is that because we have gone through the investment contract—the contract for difference—we have protected the consumer yet again. If the wholesale price is above the strike price, the generators have to pay back to the consumer—yet another protection for the consumer.

Cheryl Gillan: May I congratulate the Secretary of State on reaching this point, because I know it has been a long and difficult road? He will know that a lot of our nuclear capability lies in north Wales, with Wylfa and the decommissioning of Trawsfynydd. I am particularly concerned that the future of Wylfa is secured. Does he agree that this deal paves the way for a deal on Wylfa? Will he assure me that he will do everything he can to speed up the route for a successful new build at Wylfa?

Edward Davey: I can reassure my right hon. Friend, who championed the case for Wylfa when she was Secretary of State for Wales, that we are on the case. I know that Hitachi, is keen to make progress on that, and it and others will be cheered by today’s announcement. They know that the Government are leading the way, taking the tough decisions and developing the most attractive market in the world for new nuclear.

Roberta Blackman-Woods: I heard the Secretary of State announce this development on BBC radio this morning, but his estimate of the number of jobs to be created seemed to vary with each question asked. What exactly does “up to 25,000 jobs” mean and how many will be likely to go to UK residents?

Edward Davey: That is a fair question. I mentioned three figures on jobs: over the lifetime of construction, we expect 25,000 jobs to be created; at peak, on site, there will be 5,600; and when the plant is finished and starts generating at full capacity, we expect there to be 900 full-time permanent jobs. They are different figures, but they are also very impressive figures.
	I am afraid we have not done the analysis on how many of those jobs will be done by UK passport holders, but we expect a lot of them to be British. One reason EDF is investing in the local college is to bring on apprentices and young people in the area so that they can be the trained nuclear engineers of the future, working at Hinkley Point C and beyond.

Andrew Bridgen: My right hon. Friend rightly stated that energy security relied on diversity of supply, so does he agree that consumers and the industry will be relieved that, thanks to his decision, new nuclear will form a large and reliable proportion of that supply?

Edward Davey: My hon. Friend is right that diversity is critical if we are to keep prices down. I am obsessed with ensuring that we get a good deal for the consumer and British industry, and part of that strategy is to ensure we have diversity, so that technologies and companies are competing and we are also applying downward pressure on prices.

Diana Johnson: Does this announcement prove that the Government do not mind British taxpayers paying for and subsidising Government-owned utilities, but only as long as they are foreign-owned Government utilities?

Edward Davey: The taxpayer is not subsidising this, so the hon. Lady’s question is not relevant.

Nigel Evans: Many converts become zealots to the cause. May I encourage the Secretary of State to be turbo-charged in his zealotry for nuclear energy in the future so that we can have more announcements like today’s? Anything that makes us less reliant on imported energy, particularly French nuclear energy, has got to be a good thing, and anything that protects England’s green and pleasant land from the invasion of yet more wind turbines has got to be a good thing.

Edward Davey: The hon. Gentleman was doing so well. I have to tell him that there are zealots on all sides of this argument, as I have found, which is why I take, I think, a more balanced, pragmatic approach in favour of a mixed, diversified electricity supply focused on low carbon. I am a zealot not about nuclear, onshore or any particular renewable technology; I am a zealot about climate change. That is what every Member needs to be a zealot about. Climate change is one of the big challenges for this political generation, and we have to face up to it, so I plead guilty to being a zealot about tackling climate change.

Barry Sheerman: I have long been a mild supporter of nuclear energy, but I am concerned and nervous about today’s statement, because I have not got the competence—I do not think most people in the Chamber have the competence—to judge whether this is really a good deal. But let me say this: owing to the botched privatisations of the ’80s and ’90s, we have not got the capacity in the energy sector to do this deal ourselves; it will be led by French technology and manufacturing and backed by Chinese finance. What sort of humiliation is this for Britain?

Edward Davey: It is not a humiliation, but a big triumph, actually, that many other countries want to put their money into the UK market to build nuclear. I hope the hon. Gentleman is moving from mild to enthusiastic support and that my earlier point to the hon. Member for Brighton, Pavilion (Caroline Lucas)—that the National Audit Office will look at this—reassures him that the details will be properly scrutinised both in this House and by the NAO.

Ben Gummer: I congratulate my right hon. Friend the Secretary of State and the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon) on the excellent, careful deal that they have struck with EDF. The Secretary of State will know that many people in Suffolk are keen to see a similar deal for Sizewell, which is in the constituency of my hon. Friend the Member for Suffolk Coastal (Dr Coffey). What progress has his Department made towards making that a reality?

Edward Davey: I know that EDF wants to pursue that matter, but my hon. Friend will not be surprised to learn that it has been focusing on Hinkley Point C. We are now entering the final stages of the negotiations and we hope to secure the final investment contract next year, at which point I think EDF will turn more towards the question of the Sizewell C opportunity. He will know that, because the European pressurised reactor has gone through the generic design assessment process for Hinkley Point C, it will not have to do so again for Sizewell C. That should shorten the period involved. EDF is hoping to be in a position, after obtaining consents from us, regulatory approvals and so on, to make a final investment decision on Sizewell C towards the end of this decade. It is obviously not going to commit to that yet, but it is now focusing on that matter more than it was before.

Several hon. Members: rose—

Mr Speaker: Order. If we are to mitigate the pressure on time, there must now be a particular premium on brevity in the remaining questions and, of course, in the Secretary of State’s answers.

Graham Stringer: The Secretary of State uses his fight against climate change and the need to reduce emissions to justify charging twice the market rate for energy, but this country has one of the largest carbon footprints in the world and it is increasing because of emissions input. Why does he not talk about that failure of his policy? Will he tell us what he is going to do about it?

Edward Davey: I think the hon. Gentleman is talking about the fact that a lot of the products we import come from countries with high carbon intensity production processes. It might be a little harsh to describe this as a failure of my policy, but I know that the Select Committee and the Committee on Climate Change are interested in looking at that issue, and they should do so. In fact, this simply shows that we need a global treaty on climate change. One country cannot tackle it alone. We live in an interdependent world that has an interdependent economy and an interdependent climate. That is the answer for the hon. Gentleman: he needs to get behind the push for a global treaty on climate change.

Robin Walker: It is a matter of regret that this announcement has come as late as this. The decades of missed investment in nuclear mean that we do not have a UK generator that is capable of delivering a project of this scale. The Secretary of State has mentioned his industrial strategy for nuclear, and what it can do for the supply chain. Can he assure me that, in 10 years’ time when another Secretary of State might be announcing further nuclear investment opportunities, there will be UK companies that are able to compete for them?

Edward Davey: I very much share that vision. It was certainly the vision that the Secretary of State for Business, Innovation and Skills and I published in our industrial strategy. We want to ensure that British companies and British people get the benefit as we move towards more low-carbon technologies. That is why we have also published an industrial strategy for offshore wind.

Christopher Pincher: I congratulate my right hon. Friend on putting 6,000 wind turbines under one roof. Given that there are 60 nuclear power stations under construction around the world, and about 150 planned for construction, is he confident that the international supply chain for reactors and turbines—which Labour did nothing about—is sufficiently robust to allow this important project to remain on track?

Edward Davey: I believe it is, and the investors certainly do as well. One of the things that gives me confidence about today’s decision is the high degree of planning that has gone into the project. We will benefit from the fact that the reactor design has already gone through a long period of generic design assessment in the Office for Nuclear Regulation, and that EDF has learned lessons from Finland, France and China. My hon. Friend should therefore not worry that the supply chain will not be capable of meeting the demands. This is all in EDF’s plan.

Bob Stewart: The Chinese have developed a whole division concerned with cyber-security. The Chinese already own three electricity transmission grids in this country and they will now substantially own Hinkley. Will my right hon. Friend assure us that as much safety as possible has been put into this plan? We are in a benign environment at the moment, but if that changed, I would be concerned about running risks with our infrastructure.

Edward Davey: Of course the Government have considered the national security implications; we looked at them in some detail. My right hon. Friend the Foreign Secretary and, indeed, others have looked at cyber-security as a whole to make sure that this country is protected, not just from potential investors in the UK but more broadly. I believe that this Government have put in place the sort of protections that I think my hon. Friend is seeking.

Philip Hollobone: If all goes well and the plant is built to time, it will generate its first electricity in 10 years’ time, in 2023. If we have a blocking high-weather pressure system with no winds and freezing temperatures this winter, the plant margin could be as low as 5%. What is the risk of the lights
	going out some time over the next 10 years due to the lack of investment in our generating capacity by the previous Government?

Edward Davey: I do not believe there is a risk, but that is no credit to the Labour party. It has happened because this Government have got their act together on energy security in the short term, the medium term and the long term. Today’s announcement will help energy security in the long term, but we had two announcements in July—one from Ofgem and the National Grid to look at the short term and make sure that we have the balancing extra reserves ready to come on line at the peak; and then my Department’s announcement on next year’s capacity market, which was about ensuring capacity in the medium term. If we put the short-term, medium-term and long-term strategy together, I can reassure my hon. Friend that the lights will stay on.

Rehman Chishti: By and large, I welcome the Secretary of State’s statement. Does he agree that there is no national security risk in this case, that the National Grid Company will have oversight of this plant when it is built and that the Chinese will not have control?

Edward Davey: I agree.

David Rutley: I welcome today’s announcement, and I am delighted that this Government take seriously the role of nuclear in safeguarding our energy supply for decades to come. Given the opportunity presented by Hinkley Point, will my right hon. Friend tell us what steps are being taken, working with our partners in this project, to improve the UK skills base so that we have skills in this vital sector for decades to come?

Edward Davey: A huge amount is being done. EDF is investing in the local college to make sure that some local people get to benefit from Hinkley Point C. We also have the national skills academy for nuclear, which is taking forward skills for the wider industry. Many of our universities are more engaged in research and development, too. If my hon. Friend looks at the industrial strategy that we launched, to which I have referred several times, he will see that there is a big role in it for developing skills.

Points of Order

Cheryl Gillan: On a point of order, Mr Speaker. You will have heard me raise on the Floor of the House the fact that the Government are going to launch a hybrid Bill on High Speed 2 before the end of the year. It is going to contain an environmental statement that is rumoured to have some 50,000 pages. It is such a large document that the Government have made special provision to provide this electronically. You will also have heard rumours, Mr Speaker, that the period of consultation for the general public on this 50,000-page document is one of only eight weeks over the Christmas period. I seek your advice on whether having such a period for consultation reflects well on this House and its engagement with the public, and on whether it gives my Back-Bench colleagues sufficient time to digest the document, to establish whether they have an interest and what that interest might be and to respond to the consultation. Could you help me with anything on that front?

Mr Speaker: I am grateful to the right hon. Lady for her point of order. I understand that at this stage these are, in her words, only rumours. Such a decision is a matter for the Government, and if people receive it ill, that should of course reflect on those who are responsible for it rather than on the House as a whole. I can only say to the right hon. Lady that—as I think is evidenced by my approach to proceedings in the House—I am always in favour of a greater opportunity and a longer period for people to make their views known, rather than what might be considered to be an artificial and rather arbitrary truncation of people’s chances to contribute.
	I hope very much that the right hon. Lady’s fears can be allayed. The Secretary of State is a very experienced and wily man. There is always a danger that if a consultation is too short for the amount of material on which to consult, or else takes place over the festive season—or another holiday period—a decision by the Government to run it in that way will be regarded as cynical and ill-judged. I know the right hon. Member
	for Derbyshire Dales (Mr McLoughlin) very well, and I know that he would not be regarded as either cynical or a maker of ill-judged decisions: perish the thought! We will leave it there for today.

Andrew Bridgen: On a point of order, Mr. Speaker. Last Thursday, during questions following the response to the urgent question, I gave you cause to call my question out of order. I apologise for that. However, you went on to state that it was the 21st occasion on which you had had to do so since 2010. The House of Commons Library informs me that it was, in fact, the second occasion since 2010 on which I had officially had a question called out of order. I know, Mr. Speaker, that on five other occasions you have had to give me the benefit of your advice and experience with regard to my questioning in the Chamber, and I thank you for that, but even if those five occasions are included, the total comes to only seven rather than 21, and represents about one in every 200 of my contributions in the Chamber. Mr. Speaker, may I please put the record straight?

Mr Speaker: There is quite an old piece of advice which is usually regarded as sagacious: when in a hole, stop digging.
	I am genuinely grateful to the hon. Gentleman for his point of order, and for his courtesy in giving me notice of what I know he judges to be its import. Although I am not sure that it was strictly a point of order, I am very happy to help the hon. Gentleman in his effort to protect his reputation. I acknowledge that in my anxiety to help him last Thursday, I lured myself into multiplying by three the number of times when I had had occasion to adjust his line of questioning. As he rightly says, the number was not 21; it just felt like it. [Laughter.]
	I am happy not only to allow the correction to lie upon the record, but to assure the hon. Gentleman of my hope, and confidence, that his score will never reach double figures. I thank him for the good humour that he has shown in this matter.
	We will now proceed to the debate on the future of the BBC, which is very heavily subscribed.

Backbench Business
	 — 
	Future of the BBC

Alun Cairns: Thank you for calling me to open the debate, Mr. Speaker. I also thank the Backbench Business Committee for agreeing to the debate in the first instance.
	As you have indicated, Mr. Speaker, support for the debate came from a range of quarters: from those who are no doubt ardent champions of the broadcaster, and from those who feel that it is long past its sell-by date. I am sure that an array of views will be expressed, and, given the BBC’s recent history, I think it important for Parliament to be encouraged to comment on what has happened. I pay tribute to the way in which the Culture, Media and Sport Committee and the Public Accounts Committee have pursued many of the issues, and I am pleased that a debate in the main Chamber will allow more Members to participate, comment and air their concerns.
	It is important to consider not just the issues themselves, but the way in which the BBC has responded to them, both internally and externally. The way in which the organisation reacts reflects its culture, which is something with which we all need to be happy and content. I see myself as a critical friend of the BBC. I do not want to offer a post-mortem on each issue that has made the BBC the subject of news reporting over recent years, but I do want to question the way the broadcaster has reacted to many of those issues, which, I suggest, is defensively rather than in an open, positive and transparent way. I want the debate to be about how the BBC needs to adapt, change and reform to become a more open and transparent organisation that welcomes criticism to better inform its own internal operations. Likewise, any criticism that follows should be constructive.
	This debate builds on my ten-minute rule Bill of last November calling on the BBC to publish all invoices in excess of £500, as local authorities in England do, and asking it to give unfettered access to the Comptroller and Auditor General. I was very disappointed by its response to that call at the time, which was basically an unequivocal rejection. However, I received a letter last Friday evening advising me it was looking into ways in which it could be more open and transparent, which I naturally welcome.

Robert Halfon: I congratulate my hon. Friend on securing this debate. Does he agree that the BBC is anti-competitive, undemocratic and unaccountable and one way to reform that would be to democratise the licence fee and give licence fee payers a vote on the BBC’s board, chairman and annual reports?

Alun Cairns: I am grateful to my hon. Friend for raising those points, and I hope the BBC will actively look at such innovations as it moves forward. It needs to be more responsive and adaptable, and that model may well carry favour.

Jonathan Edwards: I, too, congratulate the hon. Gentleman on securing this debate. Does he agree with the leader of his party in
	the National Assembly who believes the BBC in Wales should be accountable to the National Assembly? Public opinion in Wales, too, is overwhelmingly in favour of broadcasting being devolved to the National Assembly for Wales, and that is also advocated by the Silk commission.

Alun Cairns: I certainly do not agree that broadcasting should be devolved—I do not agree with that pick-and-mix approach—but I do think all contributions on the question of how to make the BBC more transparent and accountable are helpful.

Cheryl Gillan: I congratulate my hon. Friend on securing the debate. Does he agree that the BBC is a national—a UK- national—resource and that it is important that the BBC as a whole is scrutinised from this House, not by other Administrations in other parts of the United Kingdom who are trying to lay claim to it?

Alun Cairns: I strongly agree with my right hon. Friend. She is a strong champion of Wales, but I absolutely agree that the BBC is a UK organisation—indeed, a worldwide international organisation—and it is right that scrutiny is by the licence fee payer, but this place needs to help develop a way in which the licence fee payers’ thoughts, views and concerns can be expressed.

Jim Cunningham: I hope the hon. Gentleman will touch on the way in which the BBC divvies out its resources to the regions, and why it is that London gets between two and three times more than other regions. Secondly, will he say something about the high salaries and redundancy payments, and, thirdly, is the reason why we cannot get to know the salaries of some BBC staff because they are self-employed?

Alun Cairns: I am grateful to the hon. Gentleman for making those points, and the move to Salford may be one example that we could highlight. No doubt there are significant benefits, but there have also been serious questions about the cost and the employment of staff in that move, and I would welcome contributions on the subject.

Several hon. Members: rose—

Alun Cairns: I want to make a little progress before taking any more interventions.
	I recognise that the BBC holds a unique place in British society. That should be welcomed. It produces and broadcasts world-class programmes and excellent news and current affairs outputs, and it would take me too long to list them all. All this success does not automatically make it special and certainly does not put it above scrutiny, however. The BBC rightly plays an important part in scrutinising public and independent organisations. Some of its journalists are among the best in the country and possibly the world. Its investigative reports have exposed wrongdoing and failure by many individuals, organisations and private and public bodies, yet it seems that none of these skills are encouraged when it comes to scrutinising in-house matters. The BBC does not interrogate its own internal affairs with the same rigour as it does so well of outside bodies. How many investigations of scandals or examples of wrongdoing involving the BBC have been made or
	prompted by the BBC? Some may argue that that is not the BBC’s job, but I would disagree. It receives £3 billion a year in public money from the licence fee payer—the fee is probably the UK’s most regressive tax.
	I do not blame the individuals within the BBC for not pursuing these matters, because this is about the culture within the organisation. The “officer class” of executives, as they were described by Lord Hall, need to engage and communicate better with those working at the sharp end, who are the ones usually left to manage the fallout and who are often frustrated and angry at the changes they see that simply will not work. Because of the BBC’s resources and its unique place, BBC executives should encourage its programmes to act where it feels there is wrongdoing, wherever that may be. I recognise that the BBC reports issues when they have come into the public domain, but that usually happens as a result of other press activity and, I suggest, when there is little alternative because of the prominence of the story.

John Redwood: Does my hon. Friend share my worry that the BBC puts out an enormous internet and web offering for free, thus undercutting other news and cultural providers who might otherwise be able to do a better job?

Alun Cairns: I certainly do agree, and I will discuss the scale of the BBC and how it squeezes out competition and innovation from other independent quarters.

Nigel Evans: When I served on the Select Committee on Culture, Media and Sport, I talked to Sir Michael Lyons, the then chairman of the trust, about transparency and how much the top talent earn. It was only because there was a leak that we got to find out how much Jonathan Ross was earning—it was £6 million a year. When I confronted Sir Michael about that he said, “He is worth every penny” and that to have transparency would force salaries up, not bring them down. We now find that quite the reverse is true. Does my hon. Friend share my belief that we should have far more transparency about the salaries being paid to top talent in the BBC?

Alun Cairns: My hon. Friend makes an excellent point, and I will wish to comment on that issue a little later. The use of public money to drive up salaries against competitors needs to be considered within the debate about the BBC.
	We need to speak positively when there are good practices; there are some isolated examples of the BBC interrogating itself. The best example was the “Today” programme interview that John Humphrys did which led to the departure of the last director-general. That, however, is the exception rather than the rule. A number of daily and Sunday newspapers and journalists regularly pursue the BBC, to which the organisation persistently defends itself, whatever the issue and whatever the rights and wrongs.

Alec Shelbrooke: How much does my hon. Friend feel that the BBC stepped back from carrying out in-depth investigations after the behaviour at the time of the 45-minute dossier?

Alun Cairns: That is an interesting point, and I hope that my hon. Friend will have an opportunity to catch the Deputy Speaker’s eye and expand on it. I know the strength of feeling that my hon. Friend has on that issue.
	I am describing the issues that the BBC should be actively examining from a management or journalism point of view, as that would be not only good management practice, but in the interests of the licence fee payer. I hope the House will allow me to demonstrate the point a little further. Recently, the BBC has not been seen in a positive light on a range of matters. The Jimmy Savile scandal was the ultimate demonstration of that, but I could mention so many examples. Why was £100 million wasted on a now-abandoned digital media initiative? Has anyone lost their job as a result? How do executives pay millions of pounds in severance payments to themselves? Why are staff allowed to leave the BBC on significant pay-offs only to return in a freelance capacity? Why, as my hon. Friend the Member for Ribble Valley (Mr Evans) mentioned, are BBC talent salaries not published? What about the extent of BBC talent—is it used as a way of preventing the publication of salaries of other senior appointments, because BBC talent is not simply restricted to broadcasters? How can presenters interview organisations that pay them handsomely to speak at conferences in a private capacity outside their employment with the BBC? Is that not a conflict of interest?

Alec Shelbrooke: I am most grateful to my hon. Friend for giving way, as he is being most generous with his time. Does he find it deeply ironic that when the BBC was found guilty of mishandling premium charge calls for competitions the result was that it was fined, once again hitting the taxpayer?

Alun Cairns: That is part of the difficulty and is another demonstration of how and why the BBC needs to look internally. I am conscious, Mr Deputy Speaker—[Laughter.]
	I would suggest that had there been similar questions about conflicts of interest and other bodies, the BBC would rightly demand answers and transparency.

Bob Stewart: While we are asking questions, I have one. Why has the focus at the core of the BBC been moved north—for political reasons, or for economic reasons?

Alun Cairns: In view of the signals I am getting from you, Mr Deputy Speaker, I should perhaps let that one hang. It is a well-made point.
	The BBC has played an important role in exposing so much wrongdoing, including the payment of civil servants through personal service firms—yet that was also taking place at the BBC. I can remember a public body being criticised for the increase in employers’ contributions to its pension scheme when only weeks earlier the employers’ contribution to the BBC pension scheme had increased even further, which was not mentioned as part of the package or the report.
	It could be argued that the Pollard review, which considered the reasons why the “Newsnight” Savile programme was pulled, is doing just what I am asking
	for. I am worried, however, that questions remain. It cost nearly £3 million and took seven months to be published, but the results should have been presented on a rolling basis. Most worryingly—I hope that this is not significant—there are even suggestions that some of the evidence from Mark Thompson was excluded from that report. I now suspect that it will be down to the Select Committee on Culture, Media and Sport to pursue the question, should any more evidence come to light.
	There have been other reports that we need to welcome, including the Dinah Rose report on the respect at work review and Dame Janet Smith’s report on the culture and practices of the BBC.
	I am conscious of the time, Mr Deputy Speaker, and would certainly echo much of what has been said about the competition, about how the BBC squeezes out innovation and about the extent of its internet coverage, which squeezes out fresh thinking and opportunities for smaller companies to make their way in news reporting, sports reporting and cultural activities. My final point, however, is about some of the things the BBC does very well.

Cheryl Gillan: I am grateful to my hon. Friend for giving way. He is making a powerful speech, making the sort of criticisms of the BBC with which I think we would all agree. Does he acknowledge, however, some of the work carried out by the BBC, particularly in Wales, where the production facilities are tremendous, including the work done with S4C and the work of Elan Closs Stephens, who heads up the BBC Wales audience council? Does he agree that perhaps considering extending the remit of the audience councils might be a way of improving and bringing better scrutiny to the work of the BBC?

Alun Cairns: My right hon. Friend makes an excellent point. She names Elan Closs Stephens and I would certainly underline her contribution. The BBC’s commitment to S4C and its funding as a channel is extremely important. My right hon. Friend also suggests one of the ways in which more effective scrutiny could be brought about.
	The BBC has in the past covered some sensitive areas of public and private life extremely successfully. Domestic violence, rape, racism and other issues have been part of its education programmes. That education has been done through dramas, news reports and other means. The most notable was the education and information campaign on HIV. Before the BBC took an active role in informing viewers, the public’s understanding of contracting HIV was confused, to say the least. Factual programmes combined with drama, such as Mark Fowler on “EastEnders”, played a significant part. With its unique status the BBC can play an important part in helping frame a decent society.

Steve Brine: On that unique position, does my hon. Friend recognise that when BBC local radio was threatened a couple of years ago in one of the BBC’s many reviews, the response from Members across the House and across the country showed how much they respect, trust and value BBC local radio, which plays a very important role in what the corporation does for our constituents? Here is one suggestion—

Alun Cairns: I am grateful to my hon. Friend for championing the cause of local journalists and local broadcasters. Very often, when decisions are taken by that officer class of executive, local broadcasters and local journalists are the ones who pay the price.

Ian Lucas: Will the hon. Gentleman give way?

Alun Cairns: I am conscious of the time, but I will give way briefly.

Ian Lucas: Does not the hon. Gentleman deeply regret, with me, that we have no BBC local radio in Wales? Unfortunately, my area of Wales suffers profoundly from not having the type of support and investigative journalism that is available, for example, from BBC Radio Shropshire?

Alun Cairns: I agree, and I underline the point.
	I hope the BBC can pursue—

Tom Clarke: Will the hon. Gentleman give way?

Alun Cairns: I should like to make progress for a moment, if I can. I have been trying to make a suggestion for a few moments. I will come back to the right hon. Gentleman, with the permission of the Deputy Speaker, a little later.
	I hope the BBC can pursue the protection of children online. It is ideally placed to help families protect children online. Few organisations are better placed to educate and inform on a mass scale. A number of newspapers have led the campaign to protect children online, to which the Secretary of State and the Prime Minister have responded admirably and have led the way in policy change. However, many children understand technology and the range of filter settings better than their parents. Many parents do not even understand the risks.
	The BBC’s mission statement and stated public purposes fit perfectly for it to become the trusted source of advice on how to protect children online. The BBC has a responsibility to educate, to inform and to use new technology for the benefit of the licence fee payer. What better way to do that than to commit part of its vast resources to help parents understand the risks that their children face online and show them how to act to protect them? The BBC has an even more direct reason to do that: BBC iPlayer allows watershed programmes to be downloaded and viewed at any time of the day. I recognise that the system raises a warning, but it merely asks for the OK button to be pressed. Combining the need to improve filtering options and to educate parents about them could therefore easily kill two birds with one stone.
	Parents must have the ultimate choice, but the BBC can play a significant part in communicating the risks and how to act to reduce those risks, should a parent want to—be it grooming on a social media site, protecting children against legal adult content, or simply explaining how SafeSearch can be switched to filter outcomes. Encryption, virtual private networks—VPNs—or peer-to-peer networks are ways around the filter and there need to be innovative ways of explaining these to parents
	and explaining how to protect children against them. There are several benefits to this approach. I am conscious of the time, but I hope that is one example where the BBC can use the licence fee money in a constructive way, recognising the changing needs and demands of the licence fee payer.

Tessa Jowell: I apologise to the House for not being able to stay for the whole debate. I hope, Mr Deputy Speaker, that you will accept my regrets.
	I welcome the debate and the sponsorship of it. I welcome the opportunity for this House to reflect on the present state of the BBC and the future ambitions that have been so clearly set out by Lord Hall, the new director-general. I also welcome the opportunity to contribute to the debate—sometimes a rather confused one, I think—on BBC governance, which I must say is not at the top of the list of issues that preoccupy licence fee payers. The BBC, despite the publicity surrounding the recent torrid and terrible revelations, has shown itself to be a remarkably resilient institution. It is important that we recognise and respect the reasons for that resilience. First, there is the high level of public support and trust, which I must say this institution and politics would be very satisfied with, even after the fallout from the terrible revelations following the Jimmy Savile inquiry and the degree of public distaste about the level of payoffs for senior managers.
	Perhaps one of the most important reasons for that high level of resilience is the public’s devotion to the BBC’s high-quality content, which is almost taken for granted. I think that it is fair to think of the more than £3 billion of licence fee payers’ money as the venture capital for the nation’s creativity.

Tom Clarke: My right hon. Friend has done a great job on this issue, as on many others. Will she allow me to introduce a Scottish issue just for a moment? The biggest decision that Scotland will have to take will be in the referendum next September. Does she agree that BBC Scotland, despite its qualities, might focus on greater impartiality on that issue than many people would consider it has done so far?

Tessa Jowell: Sadly, I am not as regular a viewer of BBC Scotland as my right hon. Friend. One of the BBC’s founding codes of trust with the public is its responsibility for accuracy and impartiality, and I think that extends to every outlet for which it is responsible. I hope that BBC Scotland will also reflect on the fact that we are better together. I thank him for that point.

John Redwood: I am interested in the right hon. Lady’s point about the very high payoffs going to managers. What does she think should be done about the very high salaries and payoffs going to managers and talent when it is paid for by a poll tax that, among other things, is levied on a large number of people who have very little income at all?

Tessa Jowell: I thank the right hon. Gentleman for his intervention. I think that transparency is absolutely of the essence in that regard. The BBC, as an independent
	entity, must be able to account to licence fee payers for the decisions taken about remuneration. I certainly think that increased transparency would be one of the ways of rebuilding trust.

Robert Halfon: Given what the right hon. Lady has just said, does she not agree that the best way to improve transparency would be by giving licence fee payers a vote on the board, on the running of the BBC and on major decisions, such as whether or not it should spend money on local radio, BBC 3, Formula 1 or whatever else?

Tessa Jowell: I thank the hon. Gentleman for his contribution; I hope that he will find some common cause with the point that I am about to develop.
	The licence fee income that comes to the BBC is the public’s money and not public expenditure in the normal sense, so I argue that it should be dealt with differently. This is an opportunity to rehearse some of the often cited arguments, so I should also say that of course the BBC distorts the broadcasting market. However, it exists, by consent of the public, as a deliberate market intervention. When I was Secretary of State for Culture, Media and Sport, I realised the importance, at a time of rapid innovation, of ensuring that the power of the BBC was not chilling in its effect on other areas of investment and innovation. We need constantly to keep a close eye on that issue.
	I want to say a couple of things about the recent revelations. They are historical, but disturbing none the less. There was much in Lord Hall’s speech on strategy to be optimistic and enthusiastic about, but the BBC as an organisation has to be concerned about culture, as that will always trump strategy and undermine the ability to deliver a strategy aligned to the licence fee payer. There has to be a sense that the Augean stables have been cleaned out. Transparency and shining a bright light on such practices is one of the ways of doing that.
	I turn briefly to the BBC Trust. There has been a profound misunderstanding about its role. The BBC Trust is the cheerleader not for the BBC, but for the licence fee payer. That places a different set of expectations and responsibilities on it. I want to set out some ways in which it might cheerlead in that way more effectively. As we move to charter review, which the Secretary of State will be thinking closely about, one of the big threats to the independence of the BBC is interference by Government—any Government. That is why the BBC must be structurally reinforced against the temptation of Governments to intervene and unduly influence it.
	The public and licence fee payers should be in the driving seat. The argument is that the BBC should indeed be owned by its licence fee payers and should become the country’s biggest mutual. I do not want to take too much of the House’s time going through the detail of how that would work, although I have given a lot of thought to that. I offer the House this idea at a time of charter review to raise public confidence and create a firewall between the public interest and the Government of the day.

Cheryl Gillan: The right hon. Lady has done considerable work on this subject. Does she therefore agree that it is highly dangerous even to consider giving devolved
	Administrations—another set of politicians—any role over the BBC? Has she had an opportunity to look at my earlier suggestion to my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) that we could extend the roles of the audience councils, particularly to something like Audience Council Wales, which represents the people who are speaking on behalf of the licence fee payers?

Tessa Jowell: I will study the right hon. Lady’s proposals. Certainly audience councils are widely seen to be successful, but we have to recognise that their impact on the direction of the BBC executive has been minimal.
	There is public concern about Government involvement compromising the independence of the BBC. I believe that there is public support for the kind of proposal that I am making, which would strengthen the Trust’s hand in relation to the executive and make it absolutely clear that the Trust is the cheerleader for the licence fee payer. There would have to be further public consultation. However, in the public consultation that I oversaw in the run-up to the current charter, it was absolutely clear that the public wanted a break from the BBC being run by the usual suspects from the establishment or governing classes, and we should respect and respond to that.
	The second argument for mutualisation is that while members of the Trust continue to be appointed via DCMS, the question of independence from Government will remain. It is clear that the public greatly value the BBC’s reputation and its charter responsibility for accuracy and impartiality. Respondents to the 2005 pre-charter consultation welcomed the lack of advertising in BBC sport and drama and the fact that the BBC set the standards for other news programmes. Therefore, a stronger Trust, backed by licence fee payers’ support, could provide a greater bulwark against those who seek to put undue political influence on the BBC or cut corners under pressure from the rest of the broadcasting market.
	The third reason—this addresses the point made by the right hon. Member for Wokingham (Mr Redwood)—is that it would give the public more of a say over programmes and direction. It is a simple principle that if we pay for the BBC, the institution should be more accountable to us. It is undoubtedly the case that following the Jimmy Savile scandal public trust in the BBC has dropped significantly. As Onora O’Neill remarked in the BBC Reith lecture on trust in 2002:
	“Reasonably placed trust requires not only information about the proposals or undertaking that others put forward, but also information about those who put them forward.”
	Again, that makes the case for building public confidence and public ownership through greater transparency.
	I hope that this is a debate whose time has come. The BBC, along with most of our national institutions, is under scrutiny at the moment. What better opportunity and better time to think innovatively about how it can change, not just in response to crises such as Savile but in reflecting the shifting relationship between the citizen and the public service, with a stronger voice for those who pay and ultimately own their public broadcaster? Reith said that the role of the BBC was to “inform, educate and entertain”. I believe that only radical public ownership by the people of this country themselves will
	continue to ensure that those values are firmly embedded at the heart of the BBC and safeguard the BBC as a truly public institution for years to come.

John Whittingdale: I congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on his success in obtaining this debate, which comes at a time when some serious questions need to be addressed. I do not want to detain the House for too long, because the Culture, Media and Sport Committee will take evidence tomorrow morning from the chairman of the BBC Trust and the director-general, so we will cover a lot of the issues in detail. We have also announced that we intend to hold a full inquiry into the future of the BBC, and that is likely to commence in the new year. That will provide an opportunity to examine these matters and I do not want to prejudge the inquiry. It is, however, worth spending a little time on the subject, because there have been some very difficult issues raised, and some very clear failures by, the BBC over the past year.
	It is important not just to focus on criticisms, but to recognise that the BBC remains one of the finest broadcasters in the world and that, at its best, it is unequalled. That is not to say that one should just point at the successes. It is important that we look at the failures and see how they can be prevented from happening again.

Nigel Evans: There was once a time when people said that only the BBC could do the arts and that it could not be done commercially. Does my hon. Friend agree that Sky Arts is now doing a tremendous job in providing arts to the masses, and that Classic FM on the radio provides classical music to a group of people who perhaps would never previously have listened to Radio 3? The onus is therefore on the BBC to keep raising the game. It does not have to chase the ratings, but it needs to ensure that it keeps providing high-quality programmes.

John Whittingdale: I am not in the least surprised to find that I agree completely with my hon. Friend, who was an excellent member of the Committee for a time. I will come on to this issue, but he is absolutely right that there has been a change in terms of the amount and diversity of content available. The advent of Classic FM, which is hugely successful, means that Radio 3 should no longer need to occupy the same space, but concentrate, as it does most of the time, on a little more challenging and difficult classical music than the more commercial Classic FM output. That applies equally in other areas.
	My right hon. Friend the Secretary of State has described this as having been an annus horribilis for the BBC, and she is certainly correct. Reference has been made to the Jimmy Savile exposure. We have seen the Pollard report and my hon. Friend the Member for Vale of Glamorgan is right that, given that a lot of money has been spent and a great deal of evidence taken, it is worrying that questions remain, particularly about the evidence submitted to Pollard by Helen Boaden and its apparent conflict with that supplied by Mark Thompson. Pollard did not really address that and I know that others may wish to pursue it.
	Of course, the bigger question was not about the Pollard review, which examined why “Newsnight” came not to be broadcast, but about how Jimmy Savile was able to operate in the way that he did for so long. We await the findings of Dame Janet Smith’s review of the culture of the time. That may prove to be rather more shocking and it may have greater lessons of which we will need to take account.
	The next failure, which was certainly as shocking, was the Lord McAlpine programme. It would have been the most catastrophic failure of editorial judgment at any time, but it defied belief that it happened such a short time after the failure to broadcast the Savile programme. Obviously, that led to the resignation of the then director-general, but there was a failure in editorial standards right across the news and current affairs division, and it is still not clear to me that everybody responsible has been identified or that sufficient action has been taken.
	Another issue is the so-called respect at work inquiry into the bullying practices that apparently took place over a long period and the failure of management to take any action when presented with worrying findings about the way in which some employees at the BBC were treated. The right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell) said that those were historical episodes. There is evidence that the bullying is not an historical, but a recent practice. The Select Committee will pursue that matter with the management of the BBC.
	A lot of attention has been given to the level of the pay-offs and salaries. Those are serious matters. A culture appeared to exist whereby a small group of people at the top of the BBC awarded each other pay-offs when they came to leave. Those severance payments far exceeded any contractual liabilities.

Alec Shelbrooke: My hon. Friend hits on an important point about the costs that people at the BBC brought forward. Will he comment on the problem that the BBC’s behaviour, for example in the Jimmy Savile case, leaves it open to being sued by the relatives, which would create a multi-million pound compensation deal? The trouble is that that bill would, once again, be paid by the taxpayer. The BBC has a commercial arm. Does my hon. Friend have any thoughts on how the confidence of the public, who pay a tax to the BBC, is affected by these matters? It is not just the salaries that outrage them, but the fact that every time the BBC does something wrong, it is the taxpayer who pays the bill.

John Whittingdale: I hope that my hon. Friend will forgive me if I do not follow him in talking about the legal liabilities that may flow from the various cases. He made the point earlier that the BBC has been fined for breaches of the broadcasting code. If a publicly funded organisation such as the BBC is required to pay a fine, it of course comes out of the licence fee. It may be that we have to consider other measures. A fine is not necessarily the best way or even a sufficient way to punish failures by the corporation.
	Although the severance payments are a serious issue, the amounts of money involved were relatively small. By far the worst financial failure of the BBC is the
	digital media initiative, which has cost the licence fee payer £100 million, to no benefit whatsoever. It angers people in the BBC, as much as people outside, that they have been required to deliver savings in front-line programming, when they see huge amounts going on senior management salaries and pay-offs, and the huge waste of money in the digital media initiative. It worries me that, in making efficiency savings, the BBC has made cuts in some of the areas that it is most important for it to invest in, such as news and current affairs and local radio. It is no wonder that there is serious anger throughout the BBC when its employees have been told that investment in certain types of programming cannot be afforded, but they then find that £100 million has essentially been thrown away on the digital media initiative. That reflects a failure of governance.
	I listened carefully to what the right hon. Member for Dulwich and West Norwood said. She recognised that the existing model is flawed and that there needs to be change. That is clear to me. There is a conflict between the two roles of the trust, even though I hear what she says about the trust being the cheerleader for the licence fee payer. I was interested in her idea about a mutual status. Perhaps she would like to expand on that further when the Select Committee considers the future of the BBC in the new year. It is certainly something that we would consider.
	My view has always been that the BBC needs to be properly regulated from outside. It already is in some areas by Ofcom. I have always found the argument that Ofcom is well equipped to carry out the regulatory functions persuasive. Perhaps the BBC should have a more traditional model of corporate governance. Those are issues that we need to consider. What is clear is that the existing model is not working.
	I welcome the announcement by the Secretary of State that the National Audit Office will have full access to the BBC. That has been called for by successive Chairmen of the Public Accounts Committee over the past 20 years. The BBC has said repeatedly that that would be a dangerous intervention and that it might interfere with editorial independence. That is absolute nonsense. There is no reason why the NAO should not examine the accounts of the BBC—that does not represent editorial interference. In my view, what has come out over the past year, particularly with the DMI, makes it plain that the NAO needs that full access. I therefore very much welcome my right hon. Friend’s announcement.

Tessa Jowell: I agree with the hon. Gentleman about the NAO and think that arguments against that view are insubstantial. I take issue with him, however, about his assertion that the present model is flawed. It is not the present model of governance that is flawed, but the failure of individuals within that to make the right decisions and intervene sufficiently early. For example, the trust could have conducted an investigation into levels of pay-off, but it did not do so quickly enough. Many lessons have been learned, but it is a mistake to conclude from that that the model itself is flawed.

John Whittingdale: I certainly agree that there have been failures by individuals, both in BBC senior management and in the trust. Whether we can draw from that a more fundamental problem with the model of governance is open for debate. I was opposed to that
	model of governance when the right hon. Lady created it some time ago, so I can at least claim consistency. It is clearly something we will need to consider and debate in the run-up to charter renewal.
	I hope that this discussion and the Select Committee inquiry will begin a debate about the role of the BBC today. The BBC is good at displaying all it does. It has a huge range of TV channels and radio stations, and it is expanding online and launching more services on the iPlayer. However, the world has changed—and is changing—so much in the media. There has been an explosion in the past few years in the number of different content outlets, and that is continuing. We now have a successful ITV commissioning really good content.

Steve Brine: I know my hon. Friend is a great thinker on this issue, so let me run a point by him. Is the sheer scale and size of the BBC some of its problem? My constituents pay for highly commercial ventures such as “Strictly Come Dancing” and Radio 2, which could survive well in a commercial environment. The BBC also does great investigative journalism, and things such as “BBC introducing”, which Radio 1 does so well. If the BBC got out of some of the ratings chasing and competing with the “X Factor” on Saturday night, it could do so many more good things such as local radio and the other things I have mentioned.

John Whittingdale: I agree with my hon. Friend, and the point I was coming to is that that issue should be part of the debate about what the BBC should be doing—and, indeed, what it should no longer be doing—in this new environment. I have referred to ITV’s success, and we now have Sky investing a huge amount in original content and British programming—my hon. Friend the Member for Ribble Valley (Mr Evans) mentioned Sky Arts. Perhaps even more excitingly, BT is entering the content provision market, and possibly in due course Liberty Global, which has just acquired Virgin Media, will go into content. We do not know, but that seems possible.
	A rapid change is taking place, and we therefore need to look at how the BBC fits into the new media world. As my hon. Friend the Member for Winchester (Steve Brine) was saying, there are areas where the BBC appears to replicate content that is already available in a number of different commercial places, and it is not clear to me why the licence fee payer should pay for programming that the market already supplies. We need to address that important part of the debate.
	The other part of the debate concerns whether the licence fee is still the most appropriate way to finance the BBC. I have always been critical of the licence fee, which is highly regressive, inefficient and evaded by a large number of people. The BBC director-general is now announcing that some programmes will be made available on the iPlayer before they are broadcast. That raises questions because the traditional licence fee model means that someone needs a licence if they own a television set in their corner. More and more people are now accessing content through iPlayer on catch-up, which is outside the original definition of what the licence fee should be for. Whether the licence fee is sustainable is cast into question in that different world. There is no easy answer to the question of what we put in its place—perhaps straight Exchequer subsidy is a better solution than a flat-rate poll tax, which is what
	the licence fee essentially is—but it should be an important part of the debate we need to have as charter renewal approaches.

Alec Shelbrooke: Does my hon. Friend agree that, fundamentally, the question is this: what should a public service broadcaster do?

John Whittingdale: That is the question. The debate on what public service broadcasting is has occupied my Committee and all commentators on media matters for a long period. The answer is that public service broadcasting is changing. A lot of material that could, at one time, be found only on the BBC is now available in a large number of other places and meets the definition of public service broadcasting.
	These are exciting times in broadcasting because there is a huge range of programming and choice that did not previously exist, but we need to examine where the BBC fits in with that. I remain a strong supporter of a publicly owned, publicly funded public service broadcaster. I am not sure that it needs to be as big as it currently is or that it needs to be funded in the same way as it is. I am also not sure whether it needs to do all the things it currently does. I hope we address those questions as charter renewal approaches.

Chris Bryant: It is a great delight to congratulate the hon. Member for Vale of Glamorgan (Alun Cairns) on securing the debate. I wish I could congratulate him on his speech, but, unfortunately, I disagreed with every word of it. The most exciting moment was when he declared that he was conscious. I am not sure what Hansard will make of that.
	I disagree with the hon. Gentleman on fundamental principles. First, I believe that, nearly always, broadcasting tends towards monopoly. It is in the nature of the business because it costs an awful lot to make one hour of programming. It costs a lot to broadcast it to five people, but it does not cost that much more to broadcast it to 10, 10,000, 5 million or 20 million more people. That is why the state must intervene in the market, which is why I support the licence fee.
	Secondly, risk-taking in the broadcasting industry—it is expensive to make one hour of broadcasting—is very expensive, especially in two notable genres, drama and comedy. Making drama is expensive. If people get it wrong, they might end up making 10 or 13 weeks of a programme that nobody wants to watch. Everybody will chuck mud at them for weeks. Comedy is even worse. For every “Fawlty Towers”, there is a “Miranda”—[Interruption.] I do not like “Miranda”, although some Government Members obviously do. It could be the other way round for people who do not like “Fawlty Towers”—for every “Miranda”, there is a “Fawlty Towers”. My point is simply that, in matters of taste, it is difficult to jiggle all the nation’s funny bones at the same time. State intervention is therefore important, because the market would not otherwise provide.
	Australia abolished the licence fee, and what happened? The first thing that disappeared from the market in Australia was the one thing Australians loved watching—mystery drama set in Australia. It does not exist any more. It can be seen nowhere in the world because there is no licence fee in Australia to invest in it.
	Thirdly, we need enough diversity in the whole of the market to be able to entertain the whole of the country, and to represent democratically the whole nation. A diversity of voices is therefore important. S4C in Wales is under the BBC and paid for from the licence fee, and I worry that there is not enough diversity of voices within Welsh broadcasting.
	When I was first elected, but not because I was elected, the Rhondda Leader was phenomenally popular. Currently, remarkably few people buy it. All hon. Members know that local newspapers are dying in constituencies up and down the land. That is not because of BBC online, but because people are not buying newspapers, and because, in some cases, local newspapers have failed to seize the imagination. However, I worry that local government is virtually unscrutinised. That is why a diversity of voices in the market is important.
	I am delighted that ITV in Wales decided, in the end, that it would be a mistake to move away from local news and current affairs. Otherwise, it would have lost its sense of being and its importance to the nation. However, I worry about the future because, all too often, there is only one broadcast voice outside London and the south-east. Let us face it: if the BBC excels in one thing more than anything, it is local radio. Nobody else produces the same quality of local radio—it is produced and resourced locally and brings local stories to light. Can Sky broadcast units be made to go outside the M25? Occasionally they do, such as if there are multiple murders—[Interruption.] They will visit the hon. Member for Maldon (Mr Whittingdale) because he is Chair of the Culture, Media and Sport Committee and a very important panjandrum, but, all too often, if it were not for the BBC, the television news would be a version of events from London and the south-east.

Alec Shelbrooke: Will the hon. Gentleman give way?

Chris Bryant: Of course I will give way, but the hon. Gentleman has made an awful lot of interventions already.

Alec Shelbrooke: I am most grateful to the hon. Gentleman for being generous with his time. This is a fascinating debate. I am a supporter of public service broadcasting, but is it the role of a public service broadcaster to chase ratings? That is the key question.

Chris Bryant: The hon. Gentleman walks straight into my trap. Public service broadcasting is not about making programmes that nobody wants to watch or listen to, which is in effect his argument. I do not believe that Radio 3 prevented Classic FM from coming into existence. If anything, Radio 3 enabled Classic FM to come into existence. There was competition at the start, but Classic FM found a different way of presenting classical music. It relied on an audience that was already out there—an audience created largely by Radio 3—and on players, singers and concert halls that, effectively, were subsidised by the BBC. There is a double benefit from the BBC. The licence fee paid by my constituents in the Rhondda pays for the hon. Gentleman to watch all the highbrow, intellectual stuff he watches, and to listen to the wonderfully intelligent and academic stuff he appears on and contributes to. My constituents are
	interested in watching “EastEnders” and, on Saturday evening, “Strictly Come Dancing”. They are also interested in watching sports programmes such as Wimbledon, which get very large audiences.

Alun Cairns: Will the hon. Gentleman give way?

Chris Bryant: The hon. Gentleman would not give way to me, so he can wait a moment.
	I do not want to rely on the market failure argument that has been advanced by a couple of hon. Members.

Damian Collins: rose—

Chris Bryant: Before I give way to the hon. Gentleman, who is a member of the Culture, Media and Sport Committee, I ought to give way to the hon. Member for Vale of Glamorgan.

Alun Cairns: Does the hon. Gentleman recognise that, when the BBC competes actively for sport, it drives up the prices for other broadcasters? He has mentioned Wimbledon, but no other broadcaster is allowed to broadcast it.

Chris Bryant: That is not true. Other broadcasters are allowed to broadcast it—[Interruption.] If the hon. Gentleman quietens down, he will be able to hear the answer and learn something. The truth of the matter is that, under the television without frontiers directive, to which all countries agreed, the European Commission allowed individual countries to list certain events—they must be agreed by the Commission so they are not too anti-competitive. Wimbledon is on the list of events that must be available on free-to-air television, but others can compete for it, just as they have competed for other sports that must to be available on free-to-air television.

Damian Collins: I agree with the thrust of the hon. Gentleman’s earlier comments—if everyone pays the licence fee, there should be something in it for everyone, not just for people who want to watch highbrow programmes—but does he agree that there is a legitimate debate to be had on the commissioning of programmes such as “The Voice”, because, in commissioning that, the BBC was breaking into and chasing a market that someone else had established?

Chris Bryant: There is a balancing act. I agree with the hon. Member for Vale of Glamorgan that the BBC should not pursue every sports rights battle. In the end, that cannot be in anybody’s interest. I worry, however, that when one broadcaster in the land is much bigger than the BBC in terms of financial value and has deeper pockets, namely Sky—[Interruption.] My hon. Friend the Member for Lewisham West and Penge (Jim Dowd) seems to be disagreeing. The BBC has £3.7 billion a year, with which it produces TV, radio and online content. Sky has nearly double that—£7.2 billion—yet produces far less. In those circumstances, there is a danger if the BBC merely ends up in a competition for further sports rights.

Barry Sheerman: I know my hon. Friend will not go on about sport, which is not my strength, for too long. What he has not
	mentioned—he is making such a good speech that I am sure he will come to it—is how the BBC invests in talent right across the piece, from technology and technicians to new artists and comedians. Companies such as Sky do not invest in new talent in the same way.

Chris Bryant: It is an utter delight to see you in the Chair, Madam Deputy Speaker. In whatever small way I contributed to your election, or at least did not prevent you from being elected by supporting you, I am delighted that you are there.
	My hon. Friend is absolutely right. In many cases, the only training programmes in the industry are run by the BBC. For example, its contribution to the high arts, by funding orchestras and choirs, is one of the things that manages to keep many of our concert halls and classical concerts going. Broadcasting is one of the things we can rightly say, without any sense of British arrogance that often applies to many other things, we do better than any other country in the world. I am conscious that that is not just about the BBC. I once worked for the BBC in Brussels. I got into a taxi and the driver asked me who I worked for. I told him I worked for the BBC and he said, “I love the BBC. I love ‘Midsomer Murders’, ‘Inspector Morse’ and ‘Brideshead Revisited’.” I did not point out to him that they had been made by ITV. We get a double benefit from the BBC, because it creates a competition for quality. It is not anti-competitive—quite the reverse. It is profoundly competitive, because it creates a competition for quality.
	Contrary to the grand sweeping statements by hon. Member for Vale of Glamorgan about how the BBC never investigates itself, I have heard every director-general, and most directors of programmes, quizzed on BBC radio and television programmes with an aggression equal to that shown to any politician. I do not recall, not even throughout the phone hacking scandal at the News of the World, Rupert Murdoch ever being interviewed by Sky. That is not to say that I do not think Sky is a good broadcaster; I think it is a great news broadcaster—it adopts a different attitude and that is great. I would just point out that, if anything, the BBC racks itself with guilt almost too much on occasion. It did not do a good job with regard to Savile or Lord McAlpine. It did not cover itself with glory in its approach to the National Audit Office, as the hon. Member for Maldon said, and to which I have referred to many times before.

Alun Cairns: rose—

Chris Bryant: I will not give way to the hon. Gentleman again, because I have already made a long speech and I am sure that Members do not want me to go on for ever. I have at least united the House on that point.
	There are other critiques I would make of the BBC. The Chair of the Select Committee said that the chairman of the BBC Trust and the director-general are appearing before his Committee tomorrow. I hope they are not appearing together. [Interruption.] He is saying that they are. I think that is entirely wrong as they have completely different jobs to do. They should never, ever appear on a panel together. They should not do joint press conferences or appear before a Select Committee together—perhaps they could appear one after another. This is where the BBC has gone disastrously wrong in the past few years. The chairman of the BBC Trust seems to think that his job is always to defend the
	director-general and vice versa. I disagree with that. The two bodies should be far more independent, as was argued in a report brought out in 1948.

John Whittingdale: The hon. Gentleman makes a fair point, one that the Committee has thought about. I agree that sometimes the two roles are not as distinct as they should be and there is a risk that bringing those people in together contributes to that. However, the risk we run by adopting the other strategy is that the chair appears and says, “That is entirely a matter for the director-general, so I’m not willing to answer it,” and half an hour later the director-general says, “I am not going to answer that, because it is a matter for the trust.” By having them together, we do not allow them the opportunity to shift responsibility on to the other.

Chris Bryant: It may be that the hon. Gentleman has a point and that the Committee needs to think about how it can interrogate people with consistency, and perhaps it should be done on the same day so that they cannot pass the buck in that way, but in the past two years we have far too often seen Lord Patten appear beside the director-general in press conferences. That conflates the two roles and confuses the public. It means that the criticism rightly made by the hon. Member for Vale of Glamorgan on the transparency of arrangements of the governance of the BBC is lost. We could do far better. I would make other criticisms.

Jim Dowd: My hon. Friend alluded to me earlier when he referred to the position of the BBC in relation to other broadcasters. He mentioned the person who thought that “Midsomer Murders” and “Brideshead Revisited” were made by the BBC. Does that not demonstrate that the BBC is rightly or wrongly—in most cases wrongly—held to be the gold standard of British broadcasting? We should defend that, but the BBC has to understand that it is the only organisation in Britain with a legally enforceable income without it producing anything. It has to demonstrate that it is worthy of the licence fee.

Chris Bryant: Of course I agree with that. I was merely trying to make the point that many people think and say that the BBC is a vast leviathan in the British broadcasting market, whereas actually the leviathan is Sky. Sky hoovers up rights, has control of the platform, and is profoundly anti-competitive. If we did not have the BBC, we would have a denuded broadcasting market in the UK.
	I would make many other criticisms of the BBC. BBC Wales sometimes seems to believe that its job is to create a Welsh national identity, which is far too close to nationalism for my liking. It often portrays my constituency as a drug den or as the murder capital of Wales, because those are the only times it ever comes to the Rhondda to report a story, and the truth is very different. The BBC is often far too right-wing in the way it presents news. For example, it barely seems to have noticed that the national health service in England is being privatised, and two of its most senior broadcast journalists were formally Conservatives, not members of the Labour party.
	My fundamental point, and the Chair of the Select Committee gave away the line, is that we all know there are regressive elements to the licence fee, but it is a bit
	like what Churchill said about democracy: there is nothing better. What else are we going to do, other than have the licence fee, to invest in broadcast talent and the arts, and to ensure that there is something for everybody that comes out of a licence fee which is paid for by all?

John Leech: It is a pleasure to see you in the Chair for the first time since you were elected, Madam Deputy Speaker. I find myself saying, for the first time in my eight-and-a-half years in Parliament, that it is a pleasure to follow the hon. Member for Rhondda (Chris Bryant). I agreed with almost everything he said, which is a fairly uncommon occurrence.
	I am delighted to speak in this important debate about the future of the BBC. It is particularly timely, given that the Culture, Media and Sport Select Committee is soon to begin a major inquiry into its future. No doubt, this debate will help to set the scene for our inquiry and to show the wide range of views of politicians on both sides of the House on what the BBC should look like in the future. I make no apology for expressing my full support for the BBC and for being committed to supporting the long-term future of its top-quality public service broadcasting, but as my predecessor as Lib Dem spokesperson for Culture, Media and Sport, the now Comptroller of Her Majesty's Household, my right hon. Friend the Member for Bath (Mr Foster), so rightly said, because it is funded by everyone, it is in the unenviable position of having to please everyone, which is impossible.
	Unfortunately, it has become increasingly fashionable to attack the BBC, particularly in the light of recent revelations about payoffs to senior executives, allegations of bullying and question marks over the handling of the Jimmy Savile affair. The BBC cannot be immune to criticism and its detractors are right that it is not perfect and sometimes gets it wrong. For instance, spending £25 million on severance payments for 150 senior managers—an average payout of £164,000—simply cannot be justified, and people were rightly mystified to hear of a £500,000 payment to the former director-general, George Entwistle, given that he had apparently resigned and that this exceeded his terms and conditions.
	Having said that, however, under the leadership of Tony Hall, the new director-general, there are clear signs that the BBC is rising to the challenge and addressing these shortcomings. For instance, the £150,000 or 12-month salary cap on redundancy payments is very welcome, as is the commitment to removing so-called gagging clauses from BBC contracts and compromise agreements. The BBC needs to draw a line under these damaging revelations and concentrate on what it does best: providing top-quality programming and completing its efficiency savings without damaging its position as the best public service broadcaster.
	Nobody can doubt that the six-year freeze created a massive challenge for the BBC—a real-terms 20% budget cut over the period—at the same time as it had to take on responsibility for £340 million of spending, including the World Service, S4C, local television and the roll-out of superfast broadband, but at the same time, the BBC was guaranteed its funding over that six-year period, which provided much-needed certainty. As we move
	forward, it is vital that this certainty be retained and that the BBC be in a position to plan for its future well into the next decade.
	The cuts have certainly not been easy: good-quality local programming has been lost in the regions, including in Manchester with Radio Manchester, while more than 2,000 jobs have been lost, on top of the thousands that went under the value-for-money, cost-cutting exercise. The number of senior management posts has been reduced by 30% since 2009, while the National Union of Journalists has raised serious concerns about the loss of investigative journalists and the potential impact on the quality of programming; and that is before recognition from management that further savings still need to be made.
	By 2017, the BBC will look radically different from the one that began this process of cost cutting, but despite the significant cuts, the BBC has maintained its popularity: 96% of the UK population access BBC content in an average week; audiences spend on average almost 19 hours with the BBC each week across all its services; when asked which media provider they most trusted, 58% of people said the BBC, which was well ahead of its nearest rival, which was ITV on 14%; 78% of the public are glad that the BBC exists, up from 71% in 2008; and 76% of the public think the BBC maintains high standards of quality, up from 66% in 2008. Unfortunately, the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell) beat me to it, when she said that those are the sort of polling figures that politicians can only dream of.
	Despite its challenges and the resistance from some, the move to Media City has also been a great success and was achieved under budget. It has been a massive bonus for the north-west economy and an engine for further economic regeneration for that part of Greater Manchester. Investment in Cardiff and Glasgow has brought about similar success in Wales and Scotland.

Stephen McCabe: While it is good that we can point to investment in Glasgow, Cardiff and Manchester, are other parts of the country not entitled to a similar return, and have Birmingham and the midlands not done badly out of the distribution of spend so far?

John Leech: I recognise that Birmingham has done badly out of the move to the regions, but the hon. Gentleman will forgive me, as a Manchester MP, for welcoming investment in Greater Manchester. Nevertheless, I accept his point.
	If the BBC is to continue to succeed and maintain its position and reputation, the Government must commit to its long-term future. It is unrealistic for the BBC to expect a real-terms increase in its funding after 2017, but at the same time it is unrealistic for the Government to expect that further real-term cuts can be sustained without damaging the BBC and compromising the quality of programming.

Steve Brine: Although it might be unrealistic to expect those things, further to the point I made to the Chairman of the Select Committee, does the hon. Gentleman accept that it might be realistic for the BBC to stop
	doing some things, in certain creative spaces, and focus on doing what it is good at and what a “public broadcaster” should be doing?

John Leech: I disagree with the hon. Gentleman, because there is strong evidence to suggest that the BBC producing such content actually drives quality in the commercial market. There is little doubt in my mind that further funding cuts would be seriously damaging to the future quality of programming.

Alun Cairns: I find it strange that the hon. Gentleman thinks that further cuts would damage the BBC’s output. Have several examples not been aired already during this debate of significant waste? The digital media initiative cost £100 million, while the payoffs to BBC executives also cost significant sums—£329 million to 7,500 members of staff. Those are examples of money that has not gone into broadcasting, which is the purpose of the BBC.

John Leech: Certainly, there are examples of money not going into broadcasting, but I think the new director-general has got a grip of what has gone on in the past, and I would expect it not to happen in the future. One good example is the restriction of payoffs for senior executives to a year’s salary or £150,000, which is line with senior civil servants. My biggest concern is that future cuts to BBC funding would be most severely felt in local and regional broadcasting.

Gareth Johnson: Will the hon. Gentleman give way?

John Leech: If the hon. Gentleman will allow me to make a little progress, I will give way.
	The cuts have already seriously stretched resources in local and regional broadcasting, and no doubt further cuts would have a severe impact, which is why we must ensure that there are no further cuts to the BBC after the six-year licence fee freeze comes to an end.

Gareth Johnson: I am grateful to the hon. Gentleman for his patience. Does that not effectively mean saying to doctors, nurses, police officers and firemen, “You can’t have any more salary”, but to the BBC, “Here you are BBC, here’s an increase”?

John Leech: That is not what I am saying. Had the hon. Gentleman let me continue for two more seconds, he would have heard me say that we should commit to inflation-linked rises in the licence fee after 2017, with a similar commitment to maintaining inflation-linked rises for at least the next five to six years. I realise that that would not be popular with some hon. Members, who believe that the licence fee should be scrapped altogether or reduced, but the current £145.50 fee works out at about 40p a day to watch the BBC, compared with around four times that amount for Sky. Furthermore, about a quarter of Sky viewing involves BBC programming that people have already paid for. The BBC is good value for money.
	Good quality public service broadcasting sets the bar high and ensures good quality commercial broadcasting, because the commercial quality needs to be good to compete. Where public service broadcasting is poor, the
	commercial sector does not need to provide high-quality programming to gain market share. The BBC sets the bar high, and needs to continue to do so. Recent research shows that public service broadcasting raises audience expectations and forces the commercial sector to raise its game too. Enhanced quality in the commercial sector then challenges public service broadcasters to achieve ever-higher levels of quality and investment to sustain public service broadcasting’s distinctiveness. Some hon. Members have questioned whether the BBC needs to continue to create certain programmes when commercial broadcasters such as Sky are now producing good-quality content. I would argue strongly that Sky is now doing that precisely in order to compete with the BBC, rather than the other way round.
	Owing to time constraints, I have concentrated my brief comments on the future funding of the BBC. I make no apology for doing so, because that funding is vital to its long-term future. If I had had more time, I would have liked to cover many more of the BBC’s opportunities and challenges. I shall briefly mention four of them. One opportunity relates to the success of BBC Worldwide and the need to encourage it to do even more. It generated more than £1 billion in revenue in 2011-12, and there is plenty of scope for improving on that figure. Secondly, I would have liked to talk about the BBC’s role in sport, and particularly its role in enhancing and showcasing women in sport. Thirdly, we need to end the anomaly whereby the BBC pays Sky to have its programmes on Sky’s platform. That is a ludicrous situation and it needs to come to an end. It should be the other way round, because Sky benefits from having BBC programmes on its platform. At the very least, the arrangement needs to be cost neutral; the BBC should not be paying.
	Finally, there is a need to protect public service broadcasting through guaranteed positioning on the electronic programming guide. That is a bit of a geeky issue, but I hope that the Select Committee will look into it as part of our BBC inquiry. The electronic programming guide could become even more important as television changes in the coming decades, and we need to set it in stone that public service broadcasting will have the prominence that it deserves on the electronic programming guide.

John McDonnell: I, too, welcome you to the Chair, Madam Deputy Speaker. I also fully concur with some of the ideas that the hon. Member for Manchester, Withington (Mr Leech) put forward at the end of his speech. I was about to say that this debate is extremely timely because the Chair of the Select Committee, the hon. Member for Maldon (Mr Whittingdale), is here, but he is just leaving the Chamber. Not to worry; I am sure that he will read Hansard in the morning. The debate is also timely as the Select Committee will have the BBC director-general and the chair of the BBC Trust before it tomorrow.
	I want to concentrate on the subject of BBC news. I am the secretary of the National Union of Journalists parliamentary group, which is a cross-party group that works closely with the NUJ and naturally has concerns about the role of journalists within the BBC. It is worth reminding ourselves that the BBC still has a 74% share of national and international news consumption and a 31% share of all television news. It is the largest single
	investor in TV news production and it spends £120 million on radio news, compared with the £27 million spent in the commercial sector.
	I was around at the time of the licence fee settlement three years ago. I was there on that dark autumn weekend when the deal was stitched up—largely influenced, I think, by Murdoch—in which the BBC took on the freeze over the next six years, the 20% cuts and, as the hon. Member for Manchester, Withington said, the additional £340 million expenditure on other services. That deal has resulted in 2,000 job lay-offs. It has also had a dramatic effect on the BBC news service. Last year, 140 jobs were lost in BBC news, and that was the eighth consecutive year of cuts in that area. That has hit investigative journalism and political coverage.
	The National Audit Office and the Public Accounts Committee have criticised the BBC for implementing the cuts to the news service without making any assessment of their impact on quality. Last month, a further 75 job cuts were announced in BBC news and current affairs. The impact of these cuts is to degrade the BBC’s unique selling point, which is the quality of its journalism and news provision.
	There are also real worries about an element of creeping commercialisation in the BBC news service. I agree with the hon. Gentleman about the importance of BBC Worldwide. The £1.09 billion income that it brought in during 2011-12 has made a significant contribution to the BBC. However, we are beginning to see the incursion of a profit motive within the BBC Worldwide’s service delivery. Peter Horrocks, the director of BBC Global News, which includes the BBC World Service. reportedly told news journalists that they would be required to come up with ideas
	“to strengthen our commercial focus and grow income”
	as part of their job appraisal process.
	That came hard on the heels of the scandal in which the BBC was forced to issue an apology for accepting £17 million from the Malaysian Government—for “global strategic communications”—after running documentaries about Malaysia. The BBC has also broadcast material on Egypt made by FBC Media (UK) Ltd, a public relations firm that was working for the Mubarak regime at the time. There is therefore a real concern that BBC Worldwide’s search for income is affecting its editorial and journalistic decision making.
	I agree that it is galling for journalists to see their jobs being cut and the service being reduced while expenditure is going into other areas, particularly into pay-offs for senior managers and others. I welcome Lord Hall’s introduction of some form of cap on redundancy payments. He has a real job on his hands, however, in tackling the BBC management style. The Chair of the Select Committee raised the issue of bullying at the BBC, and I shall go into that matter in more detail.
	The investigation by Dinah Rose QC, known as the Respect at Work review, was launched more than a year ago. It revealed
	“a culture where inappropriate behaviour has gone unchallenged and become normalised”.
	It found that staff were often too afraid to use the complaints service. The NUJ provided the BBC management and the inquiry with a dossier containing
	eye-witness accounts of bullying at the corporation, some of which were leaked to the media. It is worth putting on record some of the experiences that the staff endured.
	The NUJ dossier, which was seen by senior executives at the BBC, claims that a female journalist was offered a job promotion if she had sex with her boss in his country cottage, that a senior manager was given a pay-off despite allegations that he had sent sexual messages to two female graduates, that women working in the World Service’s Afghan department in the BBC's London headquarters were criticised for wearing western clothes and expressing opinions, and that a black radio presenter was told by his manager that his voice was “not black enough”. That is what went on at the BBC. Those are some of the complaints in the dossier that was submitted to the management.
	Michelle Stanistreet, the NUJ general secretary, has said:
	“It is quite clear that bullying has become an institutionalised problem at the BBC, one that has taken hold over many years. The report’s findings underline the fear factor that exists, particularly for those staff on freelance and short-term contracts, who know that speaking out could damage their career prospects. Many see how bullies have been allowed to get away with shocking behaviour right under the noses of senior management, so have no faith that complaining will bring any redress. Our submission was eye-watering stuff: people have been bullied because of their sexuality, or their race; women have been subjected to the most awful sexism; journalists have been openly reviled because of their age; and there are many others whose lives have been made unbearable for no discernible reason. People have been picked off simply because their face doesn’t seem to fit.”
	What also came out of this dossier was that a former human resources manager turned whistleblower alleged that the BBC adopted underhand tactics during the 2010 pensions dispute with the NUJ. He claimed that, during those negotiations, the management were putting active union members under pressure, monitoring union ballots and e-mails. That was from the dossier submitted to management. Individual cases are now being taken up and formal complaints are being investigated. However, many of the formal complaints lodged nine months ago have still not come to any conclusion. That is a long period of time in which to investigate a case and then not come to a decision.
	I thus believe that Lord Hall has a job to do in sorting out this atmosphere of bullying and intimidation within the BBC, and I doubt whether BBC management will be able to focus properly on the organisation’s future unless it restores morale, which is at an all-time low as a result of some elements of mismanagement that have gone on. When the Select Committee meets tomorrow and interviews the director-general of the BBC and the BBC Trust chairman, it must first of all get a grip on those matters of executive pay and excessive pay-offs, and it must then challenge the bullying culture revealed by the Rose review. It is important to recognise that the BBC lost the confidence of the work force because it was distant from the work force—not listening to the trade union representations made to it about a number of these issues and not understanding that the workers within the organisation wanted to make a contribution. I would welcome it ensuring that, whatever structure is established, if things continue with a board as at present, staff representation must be part of that board so that the workers can be involved in the future direction of the BBC.
	I fear for BBC news in particular. I fear that if these cuts go on, they will undermine the very product for which the BBC has become famous. That is why, in the build-up to the renegotiations of the licence fee, I agree that we cannot have a continuing freeze. There should at least be inflation proofing and we need a proper discussion about the levels of investment needed for the future of journalism within the BBC. It is too good a service to lose and too good a service to undermine in the long term by the year-on cuts that have been endured over the last eight years.

Gareth Johnson: It is a pleasure to serve under you, Madam Deputy Speaker, as well as to follow the hon. Member for Hayes and Harlington (John McDonnell), and I congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing this debate.
	The whole issue of the BBC has come to light over the last couple of years, and we have noticed that there is a tendency among some to join in with what has become known as “BBC bashing”, which seems to have become almost a national pastime. Speaking as the chairman of the all-party BBC group, I certainly do not claim that all is perfect in the BBC—far from it. It does get things wrong, but it also gets a lot of things right.
	The BBC has probably had the worst couple of years since its creation. It has never been criticised to such an extent before. Usually, with broadcasting organisations, it is the quality of the output that is criticised. The accusations tend to be that the programming is poor and not current or relevant enough. That, however, is rarely the accusation thrown at the BBC. I have not heard such an accusation during this debate. Indeed, if there is some agreement, it seems to be that the quality of programme production by the BBC is pretty much second to none.

Chris Bryant: One other point is that people rely on the BBC for accuracy in its news reporting. It may sometimes be that the BBC is not the fastest to report a story because it always waits until it has at least two people to confirm one. This afternoon, on the other hand, Wales Online, which belongs to Trinity Mirror, announced that the Prime Minister had resigned. Next to that item the website referred to “other stories” that people might like. [Interruption.] The Secretary of State looks frightened, but the Prime Minister has not resigned; he is still here. That is not the kind of mistake that the BBC would make.

Gareth Johnson: It would be damaging to my career to agree with the hon. Gentleman, but he makes a very pertinent point. With news announcements from other broadcasters, we might think “That could well be true,” but when we see a story from the BBC, we view it as confirmation because the accuracy is there and the report is right and honest. The BBC is not always first when it comes to breaking news, but it is often the most accurate.

Alun Cairns: I pay tribute to my hon. Friend for his role as chairman of the all-party group and for his contribution. Bearing in mind Lord McAlpine’s difficult time, however, I am not sure that this is the right time to highlight the accuracy of the BBC.

Gareth Johnson: There is no doubt that there have been failings at the BBC, and I am not trying to claim otherwise. What I am claiming is that there is a vein running through the BBC that prides itself on being accurate, impartial, fair and right above everything else. We should give credit to the BBC for that. We have heard a lot about the BBC’s failures—I shall make some criticisms myself—but I believe that we should give credit to the BBC where it is due.
	As I say, the BBC has its failings, but the hon. Member for Manchester, Withington (Mr Leech) made the point that we politicians could only dream of having the approval ratings that the BBC experiences today—notwithstanding the two difficult years to which I have alluded. As I said to the hon. Member for Rhondda, when the BBC makes a statement, there is an extra burden on it to be accurate, fair and unbiased. It is right to scrutinise the work of the BBC to make sure that that very high standard is upheld. I do not claim to be one of the most travelled Members, but when I watch television in various different countries around the world, the coverage can often be dreadful and unashamedly partisan. When foreign nationals come here, however, they often compliment the BBC. In other words, our reputation as a nation is enhanced by the BBC.
	BBC World is watched by billions and trusted by billions. This trust can easily be translated into trade and commerce with those countries in a way that can never accurately be quantified, but it can be relied upon to ensure that there is often a positive response to the UK from abroad. Such a response is frequently generated by the BBC through the work it does. As an opinion poll recently highlighted, it is seen as second only to our armed forces when it comes to serving our national interests positively around the world. The BBC should be commended for that.
	As chairman of the all-party group, I had the pleasure of travelling to Caversham, where the BBC monitors publicly available websites and broadcasts. This sees the BBC at its best. This gathering of information by experts in the regions it follows has proven to be an extremely valuable asset for businesses and Government investing in those areas—so much so that a large proportion of its costs are now met by the private sector. The private sector wants to invest in it and to know what the BBC is finding out about markets, and it wants to help the licence fee payer to provide that service.
	Here in the UK, we also benefit from the regional coverage provided by the BBC, which has already been mentioned. Its local radio networks and regional television coverage ensure that issues of huge local importance are covered that would otherwise never get an airing and that commercial networks could not always cover. Today, for example, I gave interviews to Radio Kent on the Dartford crossing—an incredibly important issue locally, but one that struggles for coverage beyond BBC local broadcasting. In that sense, the BBC provides a vital service in ensuring that people are informed of local issues that affect them directly. Let me add that I never feel that I am given an easy ride when I am interviewed by the BBC, but I do feel that I am given a fair crack of the whip.
	The BBC has been criticised over the last two years over the link between it and the Jimmy Savile revelations. It was right for people to make such a link, to point the finger at the BBC, and to ask what more it could have
	done to protect children from that man. There is no doubt that mistakes were made, and that this monster of a man was able to take advantage of his stardom. However, the same could be said of the national health service, given that Savile may have committed more offences in NHS properties than in television and radio studios—although we cannot be certain of that, because we cannot enumerate all the victims of his appalling crimes. Let us not forget that this was a man who, it has been said, groomed a nation. He pulled the wool over the eyes of not only the BBC but the NHS, the Crown Prosecution Service and the police. Moreover, an early-day motion was tabled in this House complimenting him on his work. So the link between the BBC and Savile is just one of numerous failings.
	The BBC has shown that it can adapt to new challenges, and also to new failings. Its personnel contracts for senior managers have been amended, and rightly so. It is right that we have criticised the way in which those contracts were originally drafted, and it is right that changes have been made. The BBC has also shown that it can respond to the economic challenges of today. We said that there needed to be cuts in its expenditure, and that the licence fee would be frozen for a number of years. We thought it right for the BBC to respond to a challenge to which we expected the public sector to respond, and, in fact, it was able to meet that challenge in a way that put some utility companies to shame.
	The future of the BBC now looks far healthier than it looked a year ago. Changes in management structures and pay have helped it enormously. It is taking on 170 apprentices, including at least one in every local radio station, and it has also embraced the technological revolution. Such innovations will play a key role in the corporation.
	Has the BBC made mistakes over management contracts? Definitely. Has it made mistakes in general that it needs to clear up? Certainly. Can it improve? Yes. Nevertheless, I believe that the BBC is respected both in the United Kingdom and in other countries throughout the world for the quality and honesty of its work, and I believe that therein lies its future.

Fiona Bruce: Let me say what a pleasure it is to be speaking for the first time with you in the Chair, Madam Deputy Speaker.
	I want to refer to BBC radio broadcasting in two very different parts of the world. First, I want to say something about BBC Radio Cheshire—or, rather, the absence of it.
	In July 2012, I had what I thought at the time was a constructive meeting in the House with David Houldsworth, the BBC’s English regions controller, and Mary Picken, head of communications for BBC English regions, about the absence of local BBC radio in Cheshire. Most of my constituency is effectively not covered by local radio at all, because there is no distinctly local independent radio broadcasting. The three of us had what I felt was a very fruitful and fair discussion. I explained that Cheshire was becoming an increasingly well-defined region with three strong unitary authorities working together to develop its economic potential—although it has been recognised not only for that economic potential
	but for the quality of life there, not least by the numerous BBC executives who have relocated to the county following the BBC’s move north. We all agreed that Cheshire was very distinct from the two city regions of Liverpool and Manchester, and that the current BBC local radio provision for Manchester, Merseyside and Stoke did not serve Cheshire appropriately.
	I accepted from David at the time that, given the current economic climate and the fact that there was no spare transmitter capacity in the region, setting up and broadcasting from a new BBC Radio Cheshire might present a challenge. That, however, was nearly a year and a half ago, and I want to revisit the issue now. More important, I want to revisit the fact that at that meeting, on behalf of the BBC, David Houldsworth acknowledged the need for a clear and identifiable source of information about Cheshire and its news and views, and said that he would take what he described as active steps to bring about the creation of a BBC Cheshire news index on the BBC news website, which would enable all the news and wide-ranging events across Cheshire to be gathered in one place for people to view. There are similar forums on the BBC website for other areas in the north-west, such as Lancashire, Merseyside, Cumbria and Greater Manchester, all of which have their own dedicated pages.
	Shortly after the meeting, Helen Boaden, who was then director of BBC News and is now director of BBC Radio, confirmed that the BBC
	“is actively looking at the idea of an online Cheshire index and is hoping that any regulatory issues can be resolved as soon as possible. If that is the case it should be possible to launch an index within six months.”
	As I said earlier, that meeting took place in July 2012. Since then—I hope that the House will forgive the pun—there has been radio silence. My office has heard nothing about the setting up of a BBC Cheshire news index. I should very much like to know from the BBC when that will happen.
	The second geographical area that I want to discuss is a world away. I must don the hat that I wear as vice-chair of the North Korea all-party parliamentary group to speak about BBC World Service broadcasting into that country-—or rather, again, the lack of it. I think that we would all accept the importance of the BBC’s role as a key instrument of soft power in promoting universal values—human rights, the rule of law and democracy—and would accept that, at its best, the BBC World Service is a beacon of hope and a voice of freedom for the oppressed throughout the world. Broadcasting into North Korea would enable the people there who are victims of the most egregious and repressive regime in the world to know that they are not forgotten.
	I hope that Members will forgive me if I remind them for a moment of the atrocities that occur in North Korea, and of why it is so important for us to shatter the wall of communication isolation that has afflicted the North Korean people for well over three generations. There are beginning to be cracks in that wall, largely owing to the advancement of technology. I think it important for the BBC to be at the forefront of that, rather than lagging behind.
	Only last week our media reported that humans were being used as guinea pigs in North Korea, and that whole families were being placed in what were effectively glass boxes so that chemical weapons could be tested. That is cruelty beyond imagination, but it is just one example of what is happening in that country. People
	are being steamrollered to death, children are being starved to death, and thousands more are wandering the streets without parents. The children of prisoners are being treated as prisoners from birth. Hundreds of thousands are being held in gulags, many simply because of their beliefs or for making a cursory statement against the regime. Many are literally worked to death in prison factories, sleeping at their machines. A vast number of people are starving. Aid is being misappropriated at borders, never reaching those for whom it is intended. Those who succeed in escaping—which is rare—may lose their lives in the process, and three generations of their families may be threatened with imprisonment, perhaps for life. In short, they are the most persecuted people on earth.
	Surely we should use our soft power through the BBC World Service to uphold human rights, democracy and the rule of law, and to develop this nation into one that we would see as habitable for human beings, not the nation we know of today. The cost of that would be a fraction of the £100 million lost from the BBC through the digital media initiative, not to mention the high celebrity salaries and executive pay-offs.
	The all-party group held a meeting some months ago with Peter Horrocks, director of global news, including the World Service, and he kindly agreed to look into this suggestion. I contacted the Foreign and Commonwealth Office some time later and received a letter in response in March 2013 from the Minister of State, my right hon. Friend the Member for East Devon (Mr Swire). He confirmed that Mr Horrocks had
	“agreed to look into the suggestions that the group made in more detail. I understand that this work is ongoing. The BBC has committed to updating the Foreign and Commonwealth Office and the APPG once this work has been completed. I do not want to prejudice that update and look forward to hearing more from Mr Horrocks on this in due course.”
	I should be grateful if the Minister present today updated the all-party group on that.
	My right hon. Friend the Minister of State also indicated that Mr Horrocks had said
	“that the BBC Worldwide are currently exploring the possibility of offering BBC cultural television programmes to the North Korean state broadcaster.”
	I should be grateful for an update on that, too.
	We know how effective the British Council has been in North Korea in its teaching of English over very many years. I believe it has now taught English to almost 4,000 North Koreans. It has had access into North Korea, which has made a huge difference. I have spoken to several escapees and refugees who learned some of their English as a result of the work of the British Council. That and the BBC World Service are excellent examples of the use of soft power, which the UK is so good at.
	We should remember that the Foreign Secretary retains his role in setting the strategic objectives of the BBC World Service. He still has oversight, and post-2014, will retain his current role of agreeing objectives, priorities and targets. I hope he will look favourably on the extension of broadcasting into North Korea and I ask the Minister to refer that point to him for a response.
	I close by reminding the House of the respect in which the BBC World Service is held across the globe for the quality of its reporting. I share that respect; it is a service that I listen to frequently when I sometimes find I am unable to access the kind of slumber I would
	wish after a long day in this House. The quality of the BBC World Service never fails to impress me, and the public agree. The Chatham House-YouGov 2012 survey on British attitudes towards the UK’s international priorities asked people the following question:
	“Which of the following do you think do most to serve Britain’s national interests around the world?”
	They ranked the BBC World Service radio and TV broadcasting second only to the armed forces, with an overwhelming 68% of opinion-formers believing the BBC World Service is the UK’s most important foreign policy asset.
	Let us use that asset to promote a safer world and address some of the most egregious human rights atrocities on earth today. That would be in the interests of not only North Koreans, but us all.

Alec Shelbrooke: First, may I say what a personal privilege it is to be making this speech under your chairmanship, Madam Deputy Speaker, so soon after your election, and may I add that I hope you have a very long career in the post?
	I also congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing this debate on the very important topic of the future of the BBC. We must focus on that subject, but, with that in mind, we must first get out of the way what many believe to be the elephant in the room: the subject of BBC bias.
	The hon. Member for Rhondda (Chris Bryant) said he found the BBC to be quite right-wing. I was monitoring the twitter feed after he said that and I do not think many members of the public agree with him. However, I sometimes think it is wrong to say the BBC is too left-wing. That very much depends on the individuals who are presenting the show, not the corporation as a whole. There is no doubt that the BBC attracts liberal-minded people to work for it. Anyone who has done BBC interviews, especially at regional level, cannot fail to notice that the newspapers available to read while waiting to go into the studio are usually The Guardian, The Mirror or The Independent—The Guardian has almost become the in-house newspaper of the BBC. Setting that aside, however, this question very much depends on the show and the interviewers.
	I think that one of the most politically neutral shows on the BBC is the “Today” programme. Some people will gasp at that comment and say, “It’s outrageous: John Humphrys sits there berating the Tories but never gives Labour such a rough ride.” However, when Labour was in power that was exactly what it said, and I think that when both sides of the House believe there is favouritism for the other side, the balance is probably just about right.
	Where the BBC does tend to have its issues are in areas such as the Radio 5 morning phone-in show. Some of the comments the presenter of that show has let slip leaves us in no doubt about where said-presenter’s political loyalties lie. That does the BBC a disservice, because, by revealing the political hand in the comments made, the idea of neutrality goes out of the window.

Damian Collins: I do not want to interrupt my hon. Friend’s attempt to be invited on to the “Today” programme tomorrow morning to talk about this debate, but does he agree that the issue is not so much about balance or the number of questions asked or the people invited on
	to shows, but about what the BBC wonderfully calls “internal plurality”, which is, in effect, making sure that a breadth of different types of opinion is involved in making decisions on what news is and what is important?

Alec Shelbrooke: We know that there was a serious editorial and management change of direction for the “Today” programme in 1987, when it was decided that the show should shape the coming day’s agenda rather than report what happened the previous day. From that moment on, it became a more controversial show among politicians. I feel there is less bias in it than people on the right of politics think. However, it is clear that there are presenters who have deeply held left-wing political views. For example, we all remember the Jim Naughtie comment on the “Today” programme: he said “we” while interviewing a representative of the Labour party, rather than “you”. Such slips do get made.
	We do not want to see programmes being dumbed-down, however. That is where “Question Time” lets the BBC down very badly, because it is dominated by left-wing opinion. I was at a public meeting last night and the question at the end was, “Who would you most like to share a panel with, and who would you least like to share a panel with?” Somebody said they would like to share a panel with Peter Ustinov, which was interesting, and somebody else said they would not like to share a panel with Nick Griffin. My answer was different. I said I only want to share a panel with people who have been put there because they have been elected by and are accountable to the public. I want “Question Time” to have elected, and therefore accountable, politicians from across the political spectrum so that the public get to hear how the issues of the day are addressed by those representing the range of political opinions in this country. I get sick to the back teeth of opinionated comedians et al going on and spouting forth when they are not in any way accountable to the public. That is where the BBC lets itself down—through what I call a dumbing-down.
	In the early-1990s “Harry Enfield’s Television Programme” probably did more damage to Radio 1 than anything else when it introduced the DJs Smashie and Nicey and completely undermined and caricatured such figures. Interestingly, I wonder whether Harry Enfield had the same impact when he caricatured “Question Time” six or seven months ago. Anybody who watched that caricature of “Question Time” will have found very little they could disagree with. It showed the BBC was in danger of losing an important part of its audience. We should consider the difference between “Question Time” and “Any Questions”, which is a very different type of show.
	That point leads on to what I want to talk about: the future of the BBC, and how the various radio and TV stations feed into the whole organisation, and how it serves the public. The hon. Member for Rhondda made an important and interesting point when he said that public service broadcasting should be there for the highbrow programmes—and I certainly do enjoy them and the education I get from them—but then asked why people who pay that tax and do not want to enjoy those programmes should have them taken away. The idea that it is the role of a public sector broadcaster to entertain and to be informative is laid out in the charter,
	but I believe that it is surely the role of a public sector broadcaster to enrich the people it serves.
	We then get into the argument about what lets such a broadcaster enrich the people it serves, and, thus, whether it is wrong to say that any of the BBC’s programmes or content should be commercialised. The BBC may have led to Sky Arts being formed and having a high-level arts output, but I would argue that BBC News followed Sky News. On stations that should be changed and either commercialised or kept in the public sector—I will deal with that point in a moment—BBC News 24 could seize the opportunity to split its content each hour between the half-hour rolling news that it does on the hour and having the next half hour become, in effect, the televised version of the World Service. This is an important point for the BBC, because it should not be competing with Sky News and its like. We hear the argument all the time that “We need to feed the 24-hour rolling news.” The BBC is a very important brand, which people feel does deliver knowledge in a way that they appreciate. It therefore has a prime opportunity to enrich people’s knowledge of what is going on politically in the world by making half of that broadcast output on BBC News 24 a televised version of the World Service.
	Which areas would I commercialise? I often feel that BBC 1, Radio 1 and Radio 2 could easily exist in a commercial environment. Why do I say that? I say it not in order to cut the TV licence, but to bring in more money for investment in the things that will enrich our lives. Let us examine some of the most successful television comedies, such as “Little Britain”. It made a journey from Radio 4 to BBC 2 to BBC 1, whereupon it was hugely successful in its sales of DVDs, books, CDs and so on, as many BBC programmes have been. I would like the BBC to focus its resources much more strategically, rather than taking a scatter-gun approach across many a television station. I feel that BBC 3 and BBC 4 are excessive and are not actually needed. BBC 2 used to have the content that BBC 4 and BBC 3 show, and it was often seen as the feeder channel into BBC 1, along with its having the highbrow content. A lot of the stuff on BBC 1 can survive in a commercial environment because it has the ratings, but that is not to say that we should bring in commercialisation to cut the television licence; the BBC should be able to gain as much revenue as it can in order to invest that back and carry on investing in British comedy, British drama and news. Although the BBC has cut its funding to news, it did not need to do that and should not have done it. I hope the Secretary of State has heard what I have said about the television side of things.
	What I am saying is far more important for the radio side of the BBC. I have said that Radio 1 and Radio 2 should be commercialised, and I hear people gasp and say, “Hang on a minute. Radio 1 does put on show some new talent and brings those sorts of things forward.” It does, but it often puts those things on early in the morning or late at night, and we also have Radio 6, Radio 1Xtra and so on. Other radio stations are involved in bringing in new talent, and some of the things on Radio 2 would probably be commercially viable.

Damian Collins: Does my hon. Friend accept that although it may be possible to turn Radio 1 and Radio 2 into commercial broadcasters, there would be a massive
	knock-on implication for other commercial radio broadcasters if those stations became fully commercialised, attracting advertising revenue and so on? We have to consider the impact on the whole market, not just whether or not an individual BBC property could survive in the private sector.

Alec Shelbrooke: I am grateful to my hon. Friend for raising that important point. The question that will need to be assessed by the Secretary of State and her Department is whether the BBC has that effect now on the commercial radio sector. For example, I am a great fan of Absolute Radio, which attracts only 1.9 million listeners. It has diversified over the years; it does things decade by decade, and plays rock and different genres. Given that it has 1.9 million listeners, one must question how it is viable. It must be viable through the commercial airtime that is available. We know that commercial revenue has reduced in the year, which is why ITV now has four minutes of adverts compared with the two minutes there were some 20 years ago, as it needs to meet the costs along the way. However, a fear of allowing something into the market should not change our approach; we should allow the commercial operators to say, “If that is there, we have to compete.” That might raise their game.
	The big “but” is that it comes down to this: do we want a public service broadcaster to enrich our lives? I believe we do, as that is very important. I believe there will always be a role for Radio 3, Radio 4 and the World Service, and, of course, for Radio 5 and local radio stations. When the cutbacks were coming to local radio stations, the point had to be made that there is no better broadcaster in this country during a time of crisis, whatever that may be—nine times out of 10 it is weather-related—than BBC local radio to inform its listeners of what is happening in the area. That service must be protected, as must the content on Radio 5 and Radio 5 live sports extra. We have had the discussion about sport, and over the years televised sport has gone from terrestrial television to the pay-per-view satellite broadcasters, but the same has not happened to radio sport; we get a wide range of programmes on the radio. That is one of the key reasons why Radio 5 should always remain on medium wave, because it has a greater reach than FM.
	That reach is also why the BBC, this Government or any future Government must not allow the FM or analogue broadcasting frequencies to be switched off in favour of digital. We had this argument in 1992, when the BBC was talking about turning Radio 4 long wave into a 24-hour news channel, and we heard about the areas that Radio 4 FM cannot reach whereas long wave can. The analogue stations may be crackly and hissy every now and again, but we do get something. I drive down the M1 every week to this place and I very much enjoy listening to Radio 5, the World Service and Absolute Radio on my in-car digital radio, but there are plenty of places along the way where the signal is completely lost. We may get hisses, cracks and bangs with an analogue signal, but with digital we either get all or nothing. So when we talk about the future of the BBC, it is very important that the BBC makes sure that, above all, it is there for everybody and there to enrich life. I hope that I have given the Secretary of State many a point to consider.

Angela Watkinson: As I am the last but one speaker, it is almost inevitable that everything I say will be repetitious, so I will not speak for too long. This debate was expected to focus on three main issues: the budget and the licence fee freeze; the failed digital media initiative; and the Savile and three associated inquiries. I will comment on those briefly before moving on to the specific point that I wish to make.
	The BBC is a bit of a curate’s egg: it is remarkably good in parts, so in fairness I shall pay tribute first to its many successes. The quality of BBC drama, its wildlife, sport, history and comedy programmes and so much else is acknowledged internationally, and rightly so. That is something of which the BBC can be proud.
	The BBC has a budget of about £3.5 billion and of course, like all public services, it thinks it needs more money but, like all other public services, it has to make decisions to reduce its running costs and protect the licence fee. At £145.50, the licence fee is already difficult for many people to afford, even in instalments. Recent accounts of embarrassingly high senior management salaries, severance packages and relocation to Salford payments would make any increase in the licence fee absolutely unjustifiable in the eyes of the public. There were 91 exceptions to the rules involving relocation payments of more than £600,000, with a very dilatory approach to recording them. The BBC review of that is still awaited.
	The digital media initiative involved a catastrophic loss of nearly £100 million. Nobody knew it was going to be unsuccessful, but it was and that underlines the need for the BBC to find savings from within its budget.
	The Savile inquiry and the need for the subsequent Pollard, Smith, MacQuarrie and Respect at Work reviews have left the BBC with a damaged reputation. There are still unanswered questions about who knew what, who colluded in the cover-up and who turned a blind eye to Jimmy Savile’s extensive activities. Public confidence will have to be regained gradually over time through the BBC’s future performance.
	I want to make a specific point about news broadcasting. There is an aspect of BBC culture that I find worrying and that I believe requires the attention of the BBC Trust and possibly the Culture, Media and Sport Committee. I was pleased to hear my hon. Friend the Member for Maldon (Mr Whittingdale), the Committee Chairman, mention that there will be an investigation into the future of the BBC in the new year. I hope that my comments might find their way into the Committee’s deliberations.
	As a publicly funded broadcasting company, the BBC has a duty to provide balanced information and not political opinion, which it gives routinely. Mass communication through radio and television gives the BBC immense power from the ability to influence its audiences and form public opinion. Television news bulletins, in particular, are a main source of information for a large number of people and the content is assumed to be non-selective and factual. I know that from the contact I have from my constituents who complain to me about what they have heard and seen.
	The personal political views of news presenters are often transparent when they conduct interviews. Interviewees with whom they do not agree are talked
	over and interrupted, and another question is asked before the first has been answered in an aggressive style that contrasts noticeably with the respectful, unchallenging approach shown to favoured interviewees.

Chris Bryant: I have often been interrupted by many a journalist on the BBC, although never more frequently than by Adam Boulton on Sky. The hon. Lady seems to be making an allegation of bias at the BBC. Can she give a specific example of a broadcaster whom she thinks has been biased or an occasion on which that has happened?

Angela Watkinson: I thank the hon. Gentleman for his intervention, which was utterly predictable. I am not going to name any individual, but I have seen countless examples of that difference in style between the treatment of one politician and another because of their political party.
	Unrepresentative individuals are often invited to demonstrate an adverse effect of a new government policy with glaring omissions in the presentation. That would be perfectly acceptable if another person were also invited who would demonstrate the benefit of that policy, but they are not. Both sides of the argument should be presented and it is not a legitimate role of a publicly funded broadcasting company to show political bias.
	The BBC informs, educates and entertains, but what it should not do is misinform by omission. The BBC Trust has 12 trustees, independent from the BBC executive board. The Trust and governing body make decisions in the best interests of licence fee payers and protect the independence of the BBC. The Trust reviews performance of all services, so that must include news, and establishes protocols, policies and guidance that govern performance. Let me quote from the BBC website:
	“The Trust must act in the public interest. We seek evidence to inform our discussions and reach our decisions through a mix of factual analysis and judgement. Governing a creative organisation on behalf of the public whose BBC it is allows for no other approach.”
	News presentation should be exempt from creativity, and factual analysis and judgment should find their basis in political neutrality. I believe that the BBC long ago gave up any pretence of neutrality. In the run-up to the local and European elections next year and the general election in 2015, the style of the BBC’s news service needs to be reviewed to ensure even-handed and fair treatment of all political parties and to introduce a party politically neutral culture in its future news broadcasting. That is in the public interest.

Damian Collins: We have had a wide-ranging debate on the BBC. I want to concentrate on the charter renewal and the new licence fee agreements from 2016 and to give some thoughts on the future of the BBC in that regard.
	I am a fan of what the BBC does. It does some incredible work; I was at a launch event last week at Broadcasting House for the coverage that the BBC is preparing to mark the first world war centenaries that start next year, with 130 commissioned new programmes
	that will produce 2,500 hours of programming. That is a pretty impressive commitment to the four-year centenary period. It is difficult to think of any other broadcaster in the world that would have prepared in that way for something that will be of huge national significance over that period.
	The BBC has a role in setting high bars for creativity and programming and doing the things that a public sector broadcaster can invest in on a scale that might not be possible for a fully commercial broadcaster. As some people have reflected during the debate, that does not mean that only the BBC can deliver high-quality programming in drama, factual programming and children’s programming. They are done to exceptionally high standards across the broadcasting world and we should appreciate that. We are fortunate to have such a rich diversity of creativity and talent working in broadcasting and programming across the country.
	As my hon. Friend the Member for Maldon (Mr Whittingdale), the Chairman of the Select Committee, is back in his place, let me say that I think that the key point in the debate about the future of the BBC and about the licence fee is how people consume television. Gone are the days when people watched television by turning on a box in a room. I noticed that in his recent speech on the future of the BBC, Tony Hall commented on the fact that on transfer deadline day there were 9 million hits on the BBC Sport website from people looking for news, that 40% of iPlayer use is through mobile devices rather than desktop computers and, on the question of TV on demand and previewing television online, that there were 1.5 million requests to the BBC for its programme “Bad Education” before it had even been broadcast. Whether one is a fan of “Bad Education” or not, that is certainly an impressive number.

Alec Shelbrooke: Does my hon. Friend feel that the advent of 4G, which will give so much more bandwidth and allow television to come through, could kill off the television licence overnight?

Damian Collins: My hon. Friend makes an interesting point. I shall come on to that and he is welcome to pick me up on it when I have made a little more progress if he feels that I have not done justice to his point. Undoubtedly, 4G will only accelerate the process of TV being watched on demand and on the go where people want to watch it.
	We should not underestimate the massive public appetite that remains for live television and radio, particularly when it comes to major national events, soap operas and dramas. The country comes together in its millions to watch something live and the appetite for that has not diminished. The evidence for it can be found in the incredibly robust performance of the commercial television advertising market, which has not been diminished by the internet at all and has recovered from the recession. When I first joined the Select Committee, I remember that the chief executive of Channel 4 said that we would never again see TV commercial revenues back at peak. Now they are not only back at peak, but in many cases exceed their previous level. That shows the demand for live TV, as well as for TV on demand.
	Through the incredible initiative of Netflix in commissioning Kevin Spacey’s remake of “House of Cards” and broadcasting that so that people could watch the
	entire series as they might watch a boxed set at home, without having to wait for the next instalment, a commercial broadcaster has demonstrated that it is possible to pay for very high-quality content through a subscription service. We must acknowledge the fact that television is changing, and therefore the role of the BBC and the nature of the licence fee will inevitably change with that.
	The director-general has set out a number of initiatives for the BBC to improve the breadth of the iPlayer, the period of time during which people can continue to watch programmes for free, and the ability to preview programmes through the iPlayer. Another interesting initiative is the creation of what he called BBC Store, whereby people can access programmes in the BBC back catalogue digitally through the iPlayer and pay a fee to do that. In the same way as they might pay to buy a DVD of programming that they were particularly interested in, they will be able to pay a subscription to watch it through BBC Store instead. This creates very interesting and exciting commercial opportunities for the BBC and raises some fair questions. If the BBC is allowed to develop more commercial properties and allowed to make more money from its back catalogue, how is this money used in the organisation? Can this be offset against future demands for a freeze or reduction of the licence fee if it is decided that that is the best way to go forward?
	The BBC is also developing for music and radio an interesting platform called Playlister, which will help people to find music played on BBC radio stations and in BBC programming, identify it and add it to their playlist through Spotify, Deezer or whichever platform they use. This creates an interesting way for people to interact with BBC broadcast content and continue to consume it through whichever channel they choose.
	This opens up an interesting debate about the way people consume the BBC outside the live environment. If people increasingly use the BBC through these online platforms, they create their own bundles of programming and content that they want to see. They prioritise the things that they want to consume. They effectively become their own director-general. They are their own editor-in-chief of BBC content. They will see that there is a great deal of content that they are happy to use and a great deal that they will not use. This may provoke a debate about the future of the licence fee.
	Should there be a licence fee that covers a core service—core programming and the sort of channels that we would expect to see in a free channel bundle? But there may be other programming and services that should be accessed through a subscription, so there would be a core BBC, plus extra services that people choose to opt into through extra channels. That should be part of the debate that we have as we move towards the charter renewal process in 2016 and consider the future licence fee.
	We know that people are changing the way that they consume media. We know that they want it on demand on mobile devices. A licence fee linked to a physical television set in a room is clearly no longer suitable, so how do we decide how the BBC should be funded? Should that be, as my hon. Friend the Member for Maldon (Mr Whittingdale) suggested, through general taxation? I am uneasy about that because the BBC would tend to become even more like a Government Department than it is already. The idea of some sort of
	fee collected through the way in which people consume BBC output, perhaps linked to what they consume, is an interesting idea and should be part of the discussions.

Alec Shelbrooke: Does my hon. Friend believe that if the licence fee were replaced by a grant through central Government, the BBC would be under any more influence from Government than it was in 2003 in the case of the 45-minute dossier, when a Government who were not happy with reports from the BBC, which turned out to be accurate, tried to impose and did indeed impose their will on the BBC?

Damian Collins: I do not believe that that pressure would exist then any more than it does now. The BBC will come to negotiate the licence fee settlement. If it is like the last few settlements, there will be downward pressure on that or an idea that the BBC should take on other services that it should pay for, as it did when taking on the World Service through the most recent licence fee negotiations. That will be part of the debate, and there will be a robust debate between the Government and the BBC.
	The BBC must be independent of Government, but it must accept that it effectively receives public money so there deserves to be some scrutiny of it. Criticisms that have been made of the scrutiny of the way the BBC uses public money have not been robust enough and are valid. Additional scrutiny through the National Audit Office may well be the best way to go. Throughout the debate legitimate questions have been asked about the BBC Trust. While I was a member of the Culture, Media and Sport Committee I thought that was particularly evident during the Savile affair and the session that the Committee held with George Entwistle.
	The relationship between the director-general and the chairman of the Trust is more akin to the relationship between the chief executive of a company and the chairman of the company, but the chairman of the trust behaved, certainly through the Savile crisis and its aftermath, like the chairman of the board of the BBC, a member of the organisation. I do not criticise Chris Patten for that. I think he did what anyone would have had to do in that situation—a senior figure who could speak for the organisation had to take charge at that difficult time, and he did that. But that is not the same as being the chairman of the body that exists to scrutinise the BBC—to be chairman of its own regulator. It raises questions about whether the current chairman of the Trust should be seen more as the chairman of a board of governors and whether there should be a new body that is more independent and that has more of an independent voice, whose members are perhaps selected with broader consent from the public, but is clearly a separate regulatory body.
	If it is not possible to achieve that, the debate will surely come as to whether the BBC should be regulated by Ofcom as all other broadcasters are, and treated as any other broadcaster, with the current chairman of the Trust being the chairman of the board of governors, representing the viewers’ voice within the organisation. That must be a legitimate part of the debate on the future of the BBC.
	If we had a blank piece of paper and if we could recreate the entire broadcast landscape of this country, we might not create the BBC as it is now, but we must
	recognise that it is a global media brand of enormous importance, it is an ambassador for this country around the world, it produces some iconic programming, it is chosen repeatedly by the nation as its preferred viewing platform for major national events, both state events and sporting events, and it is something that we should celebrate. However, there are genuine questions about the way in which it raises its finance, linked to how people consume its services and to the way it is governed, and those should form part of the debate as we come closer to charter renewal.

Helen Goodman: The BBC is an important national institution and I congratulate the hon. Member for Vale of Glamorgan (Alun Cairns) on securing this debate which has, as other hon. Members have said, come at a timely moment. Obviously, the BBC has special funding arrangements. The licence fee is unavoidable for anybody who wants to watch television. As a consequence, or perhaps in recognition of its very high status, 96% of the public use the BBC in an average week.
	However, as other hon. Members have said, a series of scandals have rocked the BBC in the past few years. The most serious was clearly the Savile scandal. It looks now as if perhaps 500 people were victims of this man, and the initial horrors have been followed by wrong editorial decisions. Then there were serious financial problems—£100 million squandered on the digital initiative, and massive executive payoffs. It was not just the sums of money, but the mismanagement of the agreement to these payoffs that was criticised. Those massive payoffs were partly caused by the fact that there was excessive pay at the top of the management of the organisation.
	We on the Labour Benches believe that the BBC must get a grip. My right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) has said that
	“it is odd that though the BBC rightly sees itself as different from commercial broadcasters—in terms of how it is regulated and treated in terms of market share . . . they argue that it’s the market pure and simple which should dictate their pay.”
	She went on to say that
	“they cannot have it both ways.”
	The consensus across the House today is that the BBC cannot have it both ways. Hon. Members also referred to the editorial errors in the case of the “Newsnight” descriptions of Lord McAlpine, and the hon. Member for Congleton (Fiona Bruce) spoke about North Korea. I thought she was going to talk about the questionable practices in the documentary about North Korea, which also raised concerns among many people.
	All those episodes seem to me to show that the BBC’s management needs to be improved. They also show that its governance has failed, because the Trust did not fulfil its role of defending the licence fee payer. In this situation, we are presented with the question, “What is to be done?” Some hon. Members believe that the model has failed and the licence fee should be abandoned. The Secretary of State has said that she believes that the National Audit Office should have further powers and rights to go through the BBC’s accounts. I hope that she will say a little more about that when she responds to the debate. In particular, I hope that she will explain
	how she would achieve that while avoiding either the reality or the perception that politicians are interfering with the BBC.
	The Chair of the Select Committee, the hon. Member for Maldon (Mr Whittingdale), made it clear that he believes that the BBC should be considerably smaller and that there is a question mark over whether it can continue to be financed through the licence fee. My right hon. Friend the Member for Dulwich and West Norwood (Dame Tessa Jowell) proposed a new model for a mutual BBC, whereas my hon. Friend the Member for Rhondda (Chris Bryant) and the hon. Members for Manchester, Withington (Mr Leech) and for Dartford (Gareth Johnson) all seemed far more supportive of the status quo and the current model—

Chris Bryant: No.

Helen Goodman: I will give way, if my hon. Friend would like to intervene.

Chris Bryant: I am sorry, but I am not all that supportive of the current model. I think that the role of the chairman of the Trust and that of the director-general have to be very clearly delineated and separated, which I do not think they are at present.

Helen Goodman: I beg my hon. Friend’s pardon, although I must say that is a rather detailed point, compared with the radical proposals coming from the Government side of the House.
	When we consider the future of the BBC, it is interesting to look at what the director-general said last week in a major speech. He said that he wanted to see public service at the heart of the BBC and promised leaner management and further cuts of £100 million. It is true that some of the recent mistakes have been phenomenally costly, so a “right first time” culture would be incredibly helpful. He spoke at length about the possibilities for the BBC of technical innovations, including improvements to iPlayer, a BBC store and iPlayer radio.
	The director-general also spoke about the significant contribution the BBC not only makes now, but can make in future, to the creative industries generally in this country. I think that is something we would all applaud. The fact that we put a 25% quota on the BBC to commission externally has turned out to be an extremely useful way of promoting and supporting other creative industries, and indeed exports, in this country. His proposals for a partnership with the British Library and a digital space with other institutions were extremely positive, as were his proposals for increasing the number of apprenticeships and the amount of education for young people in new technology. He mentioned something that I think we have all agreed with over the course of today’s debate: the importance of seeing more investigative news reporting. He also wants to strengthen the BBC’s global news presence, which will be facilitated through the incorporation of the World Service.
	Although the director-general made a number of important statements about the BBC’s content and the possibilities for technology, he said less about the management. That has been a major concern in this debate and I think that it would be helpful if the BBC paid significantly more attention to it. In addition to the issue of top pay, we will obviously look at governance
	in the process of royal charter renewal. Rather than leaping to some new model, I think that it would be more helpful to have a proper royal charter process that includes consulting the public. As my right hon. Friend said, the fact that the governance arrangements did not work in the Savile episode, for example, does not prove that the model is broken; it demonstrates that the individuals did not fulfil their roles as well as they could have done. I urge caution before we tear up the current model and move into a whole new world—I am pleased to see the Secretary of State nodding in agreement.
	It is also worth considering the future of the BBC in relation to the other large media organisations and the importance of maintaining media plurality in this country. The position of Her Majesty’s Opposition is that we should of course include the BBC in the overall understanding of the shares when measuring media markets, but that does not mean that we should apply the same remedies to the BBC as to other media organisations, and that is because of the different governance arrangements. I am not saying that those arrangements or transparency—the point made by the hon. Member for Vale of Glamorgan—cannot be improved, because I am sure that they can, but I think that all Members of the House must acknowledge that the BBC has a very different place from the private commercial operators.

Chris Heaton-Harris: I think that the hon. Lady is right up to a point, but surely we should also be looking forward when it comes to governance issues. Many of our local newspapers across the country are dying because they cannot monetise their online provision. In the United States, however, many local newspapers are thriving because they can monetise their online provision, and that is because they do not have a very big BBC online presence providing that content. I think that we need to look very carefully at that when we talk about media plurality.

Helen Goodman: The hon. Gentleman makes a good point. It is a long-standing concern that the BBC should not use its privileged position to compete unfairly with other market operators. Local newspapers have claimed that stories are taken from them and that they are not paid for them properly, which obviously is something we need to address if we are to have plurality at both local and national level.
	When we are looking at transparency and public accountability, I think that it is worth thinking about ways in which the public can be involved in commissioning. The best job in television must be that of commissioning editor. I think that a more open approach to the public on commissioning would be extremely welcome. The director-general says that he wants the public to feel that they are the owners of the BBC and that it is theirs, and we say amen to that, but we do not want it to be a piece of rhetoric; we want it to be a piece of reality.
	Hon. Members also spoke about the management and culture of the organisation. Clearly, the need to be more conscious of value-for-money issues is still essential. Only last month senior executives gave evidence to the Public Accounts Committee, and it was clear on that occasion that there is still some way to go. We would also like to see more women in the BBC, both behind the scenes and on air. My hon. Friend the Member for
	Hayes and Harlington (John McDonnell) spoke about the serious cases of bullying that the National Union of Journalists has highlighted to us. One of the things that the NUJ has said—it is a good and reasonable point—is that the BBC should have an independent, external process for handling bullying or harassment cases. Doing everything in-house does not give members of staff the confidence that they need in the system.
	I want to raise an important point about standards. There is a clear watershed on television; the content is suitable for children earlier in the evening and suitable for adults later. My impression is that the BBC does not operate radio to the same standards and that, from time to time on Radio 1 and Radio 2, there are songs, lyrics and language that are really not suitable for children. We cannot expect families always to put children into a silo of separate channels—that is not how people lead their lives, and the BBC must take that into account.
	I felt that the criticisms made about BBC bias by some hon. Members, in particular the hon. Member for Hornchurch and Upminster (Dame Angela Watkinson), were a little unfair. We can all think of occasions when we have been enraged by what we have heard on the BBC, but feeling extreme irritation sometimes does not mean that there is bias overall.
	We want to tackle the issue of top pay and strengthen accountability, but we must acknowledge that three quarters of the population believe that the BBC maintains high standards. The most important guarantee of that is continued editorial independence. Although I completely understand that the BBC must evolve with changes in technology, in the end what we look for from it are values and commitment to truth and independence.
	I end on a personal note. My mother is Danish. During the Nazi occupation of Denmark in world war two, the Danish relied completely on the BBC to get the truth. Those high standards of editorial independence and truthfulness are as relevant today, and will be as relevant in 10 years’ time, as 70 years ago. Those standards are what we want from the BBC.

Maria Miller: I thank my hon. Friends the Members for Vale of Glamorgan (Alun Cairns), for Winchester (Steve Brine) and for Hornchurch and Upminster (Dame Angela Watkinson) for securing this debate. It is difficult to do justice to the wide range of issues that have been raised.
	What I will not do is prematurely sound the starting gun for the next charter renewal, which will deal with many of the strategic issues raised today; people would not expect me to prejudge those issues. However, I will join my hon. Friend the Member for Dartford (Gareth Johnson), who struck the right tone in paying tribute to the majority of BBC staff, who produce world-class content. I particularly thank staff at the Salford offices, whom I met recently at our party conference. We should not confuse the poor judgment of some of the management —the failure of the few—with the world-class programming produced by the many. I also pay tribute to my hon. Friend the Member for Congleton (Fiona Bruce), who referred so movingly to the World Service.
	What is clear is that the BBC asks for special treatment, and it gets that—a £3 billion a year levy. It is an extremely important institution nationally and across
	the globe, as we have heard in today’s extremely good debate. The BBC is synonymous with Britain, which is perhaps why it is so damaging for it to have been plagued by one scandal after another.
	Many issues have contributed to making the past 12 months an annus horribilis for the BBC—from Savile to McAlpine and the failed digital media initiative to exorbitant severance payments. To say that as a nation we have been disappointed is an understatement. What we all want and expect from the BBC, now and in future, is relatively uncontroversial: a BBC focused on producing programming of the highest quality, setting the highest standards of behaviour and respect throughout its organisation and having an independence beyond question. However, we also expect it to be accountable to the public, who pay for it, for how it spends licence fee money. It is absolutely to be expected that both the public and this House should react when those standards are not met and that the BBC Trust and management should not only act effectively to address the issues of real public concern that have arisen, but be seen to do so.
	My hon. Friend the Member for Manchester, Withington (Mr Leech) said that it was difficult to please everyone—that is something, coming from a Liberal Democrat. He also said, absolutely rightly, that the BBC should concentrate on what it does best, which is high-quality programming. I totally agree.
	I had a little less sympathy for the hon. Member for Rhondda (Chris Bryant).

Chris Bryant: You always do.

Maria Miller: The hon. Gentleman is probably right. Perhaps I will get right what the hon. Member for Bishop Auckland (Helen Goodman) got wrong, or perhaps neither of us can understand what the hon. Gentleman said, but I think he said that only the BBC could do cutting-edge comedy. I would like to see him argue that while watching episodes of “Peep Show” or “8 Out of 10 Cats” on Channel 4. I do not think he has got that right.

Chris Bryant: Will the Secretary of State give way?

Maria Miller: If the hon. Gentleman will forgive me, I really want to move on.
	The Pollard review and the MacQuarrie report both concluded that a lack of clarity and accountability in editorial decision making created an environment of uncertainty in which such errors could be made. Dame Janet Smith’s inquiry has yet to report, but I expect the BBC to act swiftly in response to its findings. As the Chair of the Culture, Media and Sport Committee said absolutely rightly, with a sagacity that I always expect from him in debates such as this, the culture that pervades is critical. Importantly, the BBC has already instituted some changes to reform its management culture—for example, through its Respect at Work review and changes to its own whistleblowing policies.
	However, it is crystal clear that more has to be done. The events surrounding the Savile report on “Newsnight”, the failed digital media initiative and the remuneration of senior executives all seem to share a common theme: confusion around where the roles and responsibilities of
	the executive stop and those of the BBC Trust start. That is where I part company from the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell), who is not in her place. She seemed to focus on the people rather than the processes. There are issues around the ambiguity over the chain of command within the BBC, whether editorially or financially. That has had serious consequences for the corporation itself, and more importantly for licence fee payers, who all of us in the Chamber represent.
	The issue must be addressed, and it is no good waiting until a new charter in 2017 to act. The right hon. Lady floated the idea of mutualisation. It is right that she should have such ideas; as she reminded us, she was one of the architects of the current situation. Perhaps it is attractive to think in the abstract about changing structures, but I believe that here and now we have to make what we have got work. It is important that we get in place the right management who have the right judgment but also have the right governance structures to ensure that we can be proud of what the BBC is doing and are not concerned about how it is being run.
	It was right that following the catalogue of failures that we have all talked about the BBC Trust and the BBC’s executive announced a comprehensive review of the BBC’s internal governance system and structures and the culture surrounding them. They are re-examining the relationship between the Trust and the executive with the aim of simplifying it and providing better, clearer oversight of the way our licence fee is spent. The review will build on the work that has already been done by the BBC’s new executive team to simplify the organisation, reducing not only the head count of senior management but the number of boards and committees to help get to a position of more transparency over the lines of accountability. As every Member of this House would expect, I will continue to keep the BBC’s structures and effectiveness under close review to make sure that it has effectively addressed these very serious and unacceptable problems.
	Importantly, the BBC has already agreed in principle to changes to its relationship with the National Audit Office. I want this relationship to be strong and open while clearly protecting the BBC’s editorial independence. I note that the hon. Member for Bishop Auckland has concerns about this. She will know from what I have said and what has been agreed in principle that there are no proposed changes to the role of Government and Ministers in what has been put forward. However, this requires the Public Accounts Committee to act responsibly in what it does. I am sure that she will be able to discuss any concerns about this with the Chairman of the Committee, the right hon. Member for Barking (Margaret Hodge). The hon. Lady is right that the PAC has to act responsibly in how it looks at the BBC, as it does, I believe, in all its business. Concerns have been raised about whether such changes could threaten the independence of the BBC, editorially and managerially, but the existing management agreement is absolutely clear, that while the NAO is entitled to review any BBC decision, it is not entitled to
	“question the merits of any editorial or creative judgment which is made by or on behalf of the BBC”.
	That is a direct quote from the agreement that is in place. Nothing that I have suggested would change that, and I am clear that this important safeguard will be maintained.

Chris Heaton-Harris: I serve on the Public Accounts Committee. In terms of how the NAO and the PAC dealt with executive pay, I like to think that that issue would not have come to light had the NAO not had the access that it now has under the agreement that we struck, which has proved to be of great public benefit.

Maria Miller: My hon. Friend is right. I am referring to some of the issues to do with the ability to intervene on things in a timely manner. I think particularly of the Entwistle payment, where we had to wait, I think, three months before it was able to be investigated. Those sorts of things do not help when we are trying to rebuild trust in the BBC.
	So yes, lessons have to be learned from the last 12 months—some of the most turbulent times in the organisation’s existence—but we must also look to the future. We need to consider a whole host of issues that have been raised, such as convergence, which my hon. Friend the Member for Folkestone and Hythe (Damian Collins) raised, and the importance of the BBC’s independence in the future. I could go into a whole range of things, but I would like particularly to focus on the BBC’s vital role in our creative industries, which are a growing part of our economy. At a time when we are all focused on growing the economy and prosperity for the future, the BBC’s figures demonstrating that for every £1 spent on it through the licence fee there is £2 of value added in relation to the economy is a good story to be telling for jobs, expenditure in the economy and economic opportunities. This represents the BBC generating some £8 billion of economic value for the UK.
	As my hon. Friend the Member for Dartford explained extremely eloquently, the impact of the BBC goes far beyond the economic. My hon. Friend the Member for Vale of Glamorgan mentioned the BBC’s role in public health and the part that it played, extremely effectively, in raising awareness of AIDS. He asked whether the BBC could do further work on child safety online. That is an extremely interesting area. The BBC has already announced—I think in February—Share Take Care, which is an initial piece of work in that area; perhaps more will be done.
	I pay tribute to my hon. Friend the Member for Congleton for her contribution, in which she spoke incredibly powerfully about the BBC’s role in taking concepts of democracy and human rights around the world. I would like to touch on the impact that the BBC can have on the international stage in representing us and playing a key role in how we are perceived as a nation. As well as stimulating the interests of businesses and tourists alike, through the work of the BBC we are spreading Britain’s reach and enhancing our reputation as a nation. In a recent survey of about 900 business leaders in the United States, India and Australia, nearly two thirds of respondents said that the BBC was the main way in which they found out about the UK, and over half said that they were more likely to do business with the UK because of what they knew about the BBC. That is extremely powerful, and important to understand. Therefore, when the BBC fails to adhere to the standards we expect, and does so repeatedly, the potential for damage is great and goes well beyond our shores. That is perhaps another reason why this debate has been so heated at times. As a brand and as a business, the BBC has an important and powerful role
	in helping us to preserve what is great about our nation and taking to a wider audience what Britain stands for today.
	The BBC also has an important role to play in helping to preserve the culture and languages of our nations. In Cardiff, the BBC has built a drama production village in Roath that is now the BBC’s biggest drama centre in the UK, home to “Doctor Who” and “Casualty”. BBC Scotland’s presence on the banks of the Clyde has an equally positive impact. In terms of Welsh language broadcasting, in which my hon. Friend the Member for Vale of Glamorgan has a keen interest and about which we have many conversations, the BBC became S4C’s major funder in April this year. The BBC has an existing statutory obligation to provide at least 10 hours of programming a week, at a cost of roughly £20 million per year, and BBC Cymru content is regularly at the top of S4C’s viewing figures. This can be in the form of “Pobol y Cwm” or rugby coverage, the latter of which draws over 100,000 viewers, possibly confirming a stereotype about rugby being such a part of Welsh DNA—something that I can certainly agree with. I was extremely pleased with the recent spending review settlement in which the Government were able to confirm our support for minority-language broadcasting, maintaining S4C’s Exchequer funding at its current level and investing a further £1 million in MG Alba, north of the border. It is important that we are doing this given its significance to our minority languages in this country.
	A number of right hon. and hon. Members raised the issue of local radio. My hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) and I agree on many things, but on this we may have to slightly disagree. I will re-read Hansard to make sure that I clearly understood what he said. As regards digital radio, we have to be consumer-led, and that is the approach we have taken. It is important that we respond to consumer demand in that field. I am sure that he and I will continue to discuss the issue.

Alec Shelbrooke: To clarify, digital radio is an important platform, but a public service broadcaster must make sure that it can reach everybody, so if people cannot get digital radio we must make sure they can receive it on analogue.

Maria Miller: My hon. Friend makes an important point that this is about responding to the consumer. We are on common ground. Decisions have to be made at some point and we need to make sure that we take the consumer with us.
	My hon. Friend the Member for Congleton addressed the role of local radio, particularly in Cheshire. She has campaigned hard and I do not have much to add at this stage. I hope she gets the answers she needs and that BBC Radio Manchester and BBC Radio Stoke pay heed to and focus on her powerful arguments.
	The BBC has been and continues to be a creative and cultural powerhouse. It is totally unacceptable that recent scandals have overshadowed that. We need the BBC to learn from its mistakes, pick itself up, dust itself off and restore public confidence. The BBC Trust and executive must look to learn from the past and to build a BBC for the future that sets the highest possible standards in absolutely everything it does. We would expect nothing less.

Alun Cairns: In the limited time available to respond to the debate, I pay tribute to every Member who has spoken. I do not have time to go through them all, but I pay particular tribute to the Secretary of State and the Opposition spokesperson, the hon. Member for Bishop Auckland (Helen Goodman), who stayed throughout the whole debate, as well as to my hon. Friend the Member for Maldon (Mr Whittingdale), whose interventions and speech were extremely helpful. I hope that this debate will be significant for the Culture, Media and Sport Committee report, which we look forward to with great interest.
	A whole range of issues have been raised and I will try to bring them together. Many focused on structure, transparency and the licence fee, and we have also focused on public service broadcasting and what comes from it. On transparency, I pay tribute to the Secretary of State, who has achieved an agreement with the BBC and the National Audit Office. We have been calling for that greater transparency for some time. It was resisted for a considerable period and featured in my 10-minute rule Bill last November. It seems that significant progress is being made and we look forward to the NAO’s reports. The director-general’s response to me last Friday suggests that it is happy to consider grater transparency, which may well mean the publication of invoices.
	The structure is an important issue and I disagreed with much of what the hon. Member for Rhondda (Chris Bryant) said, other than one point, namely that all too often the BBC Trust and executive management appear to be one and the same and there needs to be a distinct separation. The BBC Trust needs to be the champion of the licence fee payer rather than the defender of the status quo against any criticism of it.
	This is a useful time to start asking what we want from the future of public service broadcasting. Do we want the BBC to chase viewing figures and potentially compete with what the market can deliver, or do we want it to broadcast unique programmes that can appeal to wider audiences for whom the market will struggle to provide through the income it generates?
	In conclusion, I ask the Secretary of State to take up my suggestion for the BBC to play a significant part in communicating with, and educating and informing, parents and children on online protection. That fits perfectly with the BBC’s unique status as well as its mission statements, and I hope that that is one positive that will come from this debate.
	Question put and agreed to.
	Resolved,
	That this House has considered the future of the BBC.

Natural Capital (England and Wales)

Graham Stuart: I beg to move,
	That this House welcomes the Natural Capital Committee’s first annual State of Natural Capital report; and urges the Government to adopt the report’s recommendations and to take concerted action to embed the value of natural capital in the national accounts and policy-making processes as early as possible.
	I declare my interest as chairman of the GLOBE International board and refer the House to my declaration of interests.
	May I start by congratulating the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Camborne and Redruth (George Eustice) on his appointment, which gives hope to the independent-minded everywhere? I also thank the Backbench Business Committee, chaired by the hon. Member for North East Derbyshire (Natascha Engel), for granting this debate. Thanks are also due to the sponsors of the motion, representing all three main parties, including the former Secretary of State, my right hon. Friend the Member for Meriden (Mrs Spelman). I pay tribute to her and my hon. Friend the Member for Newbury (Richard Benyon) for the role they played in steering the White Paper through Government.
	I am pleased to see that the shadow Minister with responsibility for the natural environment, the hon. Member for Brent North (Barry Gardiner), will be responding on behalf of the Opposition. Only a few weeks ago, it was he who persuaded the Backbench Business Committee to grant this debate, so it is gratifying to see that his efforts have been rewarded with such a swift promotion.
	Today’s debate was inspired by the first report by the natural capital committee, chaired by Professor Dieter Helm. The report provides a framework—and a call to arms—for the Government to place a value on natural capital. Natural capital is the stock of resources derived from the environment in addition to geological resources such as fossil fuels and mineral deposits. These goods and services include material and non-material benefits such as crops, timber, water, climate regulation, natural hazard protection, soil function, mental health benefits from contact with nature, and biodiversity.
	Without an economic price, too often natural capital has been treated as if it is of no value, yet it is a fundamental component of every country’s portfolio of wealth. For example, the UK has treated North sea oil purely as an income flow, with no allowance made for the fact that its use today depletes a national asset that cannot be replaced. By using it, we are, in effect, eating into our capital reserves, and it is right that we should acknowledge that when compiling our national accounts.
	A private company is judged by both its income and its balance sheet, but most countries compile only an income statement showing their GDP and know very little about their national balance sheet on which it all depends. Even the income measure itself—GDP—fails properly to represent natural capital. Forestry provides a good example of this. Timber resources are counted in national accounts, but the other services forests provide, such as carbon retention and air filtration, are simply ignored. This all matters deeply.

Caroline Lucas: I congratulate the hon. Gentleman on securing this important debate. Oscar Wilde famously spoke of those who know the price of everything and the value of nothing. If valuing nature in the way suggested will halt the current decline of our precious wildlife and habitats, it is to be welcomed, but does the hon. Gentleman agree that we need very strong safeguards, including in the planning system, to ensure that by putting a pound sign on priceless ecosystems such as ancient woodlands we do not inadvertently open the door to their destruction?

Graham Stuart: I am grateful to the hon. Lady for her intervention and she is right to sound a warning note. This whole area is embryonic and it needs to be treated very carefully to make sure that we do not end up with the exact opposite outcomes to those we seek by introducing such thinking in the first place.
	In setting up the NCC, the Government said that their ambition was that this should be the first generation to leave behind a superior natural environment to the one it inherited. During the 20th century we placed unprecedented demands on global ecosystems. World population grew by a factor of four. Carbon and sulphur dioxide emissions increased by a factor of 10. Fish catch escalated by a multiple of 35. This has had serious consequences.
	In 2011, the first UK national ecosystem assessment found that one third of the UK’s ecosystem services were declining. It showed that if the UK’s ecosystems were protected and enhanced, they could add at least an extra £30 billion to the UK economy. By contrast, neglect and loss of ecosystem services may cost as much as £20 billion a year to the economy. As the NCC report says:
	“The risk is that rather than underpinning future growth and prosperity, degraded natural capital assets will act as a break on progress and development.”
	The situation is worse in many places overseas. The World Bank estimates that in 2008, the costs of natural capital loss could have been as high as 5% of national income in Brazil, 8% in India and 9% in China. It found that the UK’s natural capital losses stood at just over 2% of national income, although that number is almost certainly incomplete.
	The NCC report concludes:
	“Until this is addressed, our national accounts will continue to provide erroneous signals about future economic prospects.”
	To that end, the NCC recommends that the work being undertaken by the Office for National Statistics to embed natural capital in the UK’s environmental accounts should be given the “greatest possible support” right across Government.
	The NCC’s report also recommends that the Government should initiate a programme to provide high-quality evidence on the economic value of changes in natural capital to inform cost-benefit analyses. Let us consider land use change. That may involve alterations in agricultural outputs, which have market prices, but it may also lead to changes in other factors which do not, including outdoor recreation, carbon storage and water quality. The best way to compare changes in such vastly different goods and services is to compare them in common, monetary terms. Developing a system that can achieve that reliably will not be straightforward.
	There has been recent progress in this area. The Government’s 2011 natural environment White Paper made a welcome commitment fully to include natural capital in the UK environment accounts, with the first changes coming into effect this year. On the international stage, the adoption by the UN Statistical Commission of the system for environmental economic accounts has been a major step forward.
	The prize is considerable. Measuring and accounting for changes in natural capital assets, and improving the valuation of those changes, would help to support better economic decision making. It would improve the delivery of major public policy goals, such as food and energy security, climate change mitigation and adaptation, and public health and well-being. In saying that, it is crucial that natural capital accounting is explained as a way of providing detailed information for better management of the economy. That needs to be done in a way that is coherent internationally but that resonates at home with a public who are concerned about seeing the more immediate benefits of economic growth.
	This is not some doom-laden call for us to trade off economic growth for environmental protection. Pre-Victorian England was a low-carbon economy, but it did not deliver too much by way of prosperity. Rather, this is about demonstrating that better policy can result from integrating the value of natural capital into decision making, especially in a world whose population is rising inexorably.
	That applies to Government and the world of business. The NCC report calls on the Government to work with leading companies, accounting bodies, landowners and managers to develop and test guidance on best practice in corporate natural capital accounting. As the chief financial officer of Unilever, Jean-Marc Huët, has said:
	“The current financial reporting model only tells half the story about a business’s true performance and potential. The numbers say little of its reliance and impact on natural capital, factors that will increasingly influence competitiveness in a resource-scarce world.”
	The NCC report is therefore an important document at all levels of policy making: national, local and commercial.
	It was particularly welcome that the publication of the NCC report coincided with the launch earlier this year of the GLOBE International natural capital initiative. That is an international policy process driven by national parliamentarians, with the aim of incorporating the valuation of natural capital into policy and economic decision making.
	In June this year, legislators from 20 countries participated in the first GLOBE natural capital legislation summit in the Bundestag. The summit considered the international context of the forthcoming UN post-2015 sustainable development goals, and how natural capital accounting should be addressed as a specific goal as well as a cross-cutting theme that affects the delivery of all development goals. For those who are living on less than $2 a day, half of all GDP comes from the environment and its biodiversity. It was therefore encouraging that goal 9 of the recent report of the high-level panel of eminent persons on the post-2015 development agenda, which was co-chaired by my right hon. Friend the Prime Minister, emphasised the importance of the sustainable management of natural resource assets to poverty eradication.
	The GLOBE summit in June called on Governments everywhere fully to incorporate the value of natural capital into national accounting frameworks by 2020. It saw the publication of the first GLOBE natural capital legislation study, which reviewed the measures that eight countries, including the UK, are taking to integrate natural capital into policy and economic decision making. Unquestionably, there is a long way to go before natural capital is incorporated in national and corporate accounting across the world. However, the GLOBE study shows that the direction of travel is clear and that the eight countries covered, including the UK, are leading the way.
	Embedding the concept of natural capital could mark a milestone on the road towards a more nuanced and complete understanding of our nation’s resources and the impact of our management of them. I congratulate the Government on the letter sent by the Secretary of State for Environment, Food and Rural Affairs and the former Economic Secretary to the Treasury, my hon. Friend the Member for Bromsgrove (Sajid Javid) in response to the report. I welcome its statement that
	“The measurement, valuation and good management of our natural capital is crucial if we are to achieve sustainable economic growth and enhanced wellbeing in future.”
	However, is that to be the only response from the Government, other than in this debate? My Select Committee insists on a formal Government response to each recommendation that is made in each of its reports. Surely these annual reports deserve just as serious and thorough a response.
	Do the Government agree that there is a need for a framework with which to define and measure natural capital? If so, do they think that progress is being made quickly enough? Will they set up a risk register for natural capital, as is recommended in the NCC report, and if so, when? Will they give the Office for National Statistics the “greatest possible support” in its efforts to incorporate natural capital into the nation’s accounts, as recommended by the NCC?
	The valuation of natural capital goes to the heart of the biggest question facing humanity: can we adjust our behaviour so as to live within the constraints of living on one planet? Can we live in balance with the natural world, or will we insist on testing its limits?

Jonathan Edwards: I congratulate the hon. Member for Beverley and Holderness (Mr Stuart) on securing the debate and on his opening remarks. I also pay tribute to the work of the natural capital committee.
	It is a pleasure to take part in this debate on the state of natural capital in England and Wales. I am always delighted to discuss the natural capital and resources of my country. On the face of it, the NCC report makes sensible recommendations, with which I am sure the new Welsh natural resources body, Natural Resources Wales, and the people of Wales would agree. My party would certainly agree with,
	“Genuinely embedding the value of natural capital into the fabric of economic decision-making”.
	I question the sincerity of the UK Government’s welcome for the recommendations, given their fascination with marketising, monetising and privatising everything
	in their path. It is bizarre that they have seemingly been converted to the value of natural capital to the economy and human well-being. Only last year, they tried to sell the English forests and they are currently aiming to stimulate the market for water resources and embarking on a potentially unsafe and destructive dash for shale gas.
	Any discussion of the natural resources and natural capital in Wales must concentrate on the fact that the powers over this important area are still hoarded at Westminster in the centralist grip of the British state. Wales should be able sustainably to exploit its natural and mineral resources for the greatest possible environmental, social and economic gain. However, the National Assembly for Wales has limited powers over natural resources and energy generation. The people of my country are thus unable fully to benefit financially from the exploitation, extraction or transfer of natural resources. Such financial benefits could be used to create a stronger Wales that is more economically self-sufficient. Responsibility for the planning, licensing and oversight of all resource extraction, exploitation and transfer in Wales should therefore be devolved. Some aspects of environment and natural resource policy are devolved to Wales, but the crucial ones are not. Today, the Westminster Government are threatening a grab for Welsh natural resources in the form of shale gas exploitation, water extraction and energy production, all without Wales being in control or her people fairly compensated.
	Water is a highly emotive issue in Wales, and the flooding of the Tryweryn valley to provide a reservoir for Liverpool Corporation casts a long shadow over the modern history and politics of Wales. Many still see that as the catalyst for Welsh political self-realisation, and it spurred on a generation to secure an element of home rule, convincing them that Westminster would never truly work for Wales. That culminated in the struggle for a national assembly at the end of the last century, and the process carries on today. It is safe to assume that I would not be here today representing Plaid Cymru were it not for the episodes in Tryweryn. Only last night on S4C, there was a terrific programme about the fight against the potential flooding of the Gwendraeth valley in my constituency, and the battle of Llangyndeyrn, in which the local community heroically fought against Swansea Corporation’s attempt to flood prime agricultural land to provide water for Swansea.
	Wales is currently not in full control of its resources. The Crown Estate and energy planning above 50 MW remain the preserve of the British state, meaning that we are unable truly to have ownership in any sense or fully to benefit from our natural capital. That is why Plaid Cymru has been making the case for those areas to be devolved as part of the cross-party UK Government Commission on Devolution in Wales. Polling carried out by the commission—the most detailed ever undertaken in Wales since devolution—revealed that an overwhelming 70% of the people of Wales want full devolution on energy policy. Any political party that ignores that does so at its peril.
	Surely the people of Wales, at the bottom of the economic table for the nations and regions of the UK, should be fairly compensated for the natural capital that our land holds. All around us we see Welsh natural resources plundered without economic gain for its people. Current plans for fracking, and more recent attempts at
	“stimulating” the market in water, present a real threat to the natural capital of Wales. The water of Wales may not match Scotland’s oil in terms of wealth, but it is a resource with value and the people of Wales should receive a fair return. Although the upcoming Water Bill intends to leave Dwr Cymru—or Welsh Water—intact, Severn Trent Water cuts a swathe into Welsh territory, and could mean that the water of Wales is extracted for vast profit in future. With Gulf state sovereign wealth funds looking to buy Severn Trent Water and clearly seeing it as an investment opportunity for the future, Wales and its people should not be left at a disadvantage.
	Full territorial integrity should be recognised, and it should be for the people of Wales to decide what happens to the water of Wales through our democratic institution, the National Assembly for Wales. It is therefore crucial that full control of water is devolved to Wales. It is a continuing disgrace that the Labour Government cynically blocked full devolution of water policy in the Government of Wales Act 2006, leaving the power of veto with London Ministers. Full control over water would finally end the grossly unfair system enshrined in the Water Act 1973, and perpetuated by the 2006 Act, in which water was lent to Severn Trent Water at a scandalously low rate of 5p a year for 999 years and the Secretary of State for Wales was empowered to overrule the National Assembly for Wales on matters of Welsh water supplies to England.
	Plaid Cymru has put forward the case for the devolution of the Crown Estate to Wales so that our natural resources are secured for the benefit of the people of Wales. Last year the Crown Estate in Wales more than doubled its surplus from £2.5 million to £6.5 million. The Crown Estate is also set for a multi-million pound windfall from the development of wind farms on Crown land and on the sea bed around Wales. That should be going to the Welsh Government to help fund Welsh public services and invest in Welsh infrastructure.
	The Westminster parties are concerned with helping those who seek to extract maximum profit from natural capital and resource, in spite of recommendations contained in reports such as that featured in today’s motion. Only Plaid Cymru puts Wales first and fights to ensure that the people of Wales control and benefit from their own natural resources.

Caroline Spelman: I was lucky enough to be at the helm at the Department for Environment, Food and Rural Affairs when the Government published the first natural environment White Paper for 20 years. We had the lofty ambition—cited by my hon. Friend the Member for Beverley and Holderness (Mr Stuart)—of being the first generation to leave the natural environment in a better state than we inherited. The significance of that challenge is not to be underestimated because it comes against the backdrop of an accelerating loss of species, with natural capital being lost at an ever-faster rate. The United Nations Environment Programme has calculated that for the UK, although overall wealth increased up to 2008, during the same period natural capital decreased by 30%. I invite Members to consider whether we want to go down in history as the generation that knowingly squandered the inheritance of future generations. I do not think so.
	The Government had to decide what structures to bring in that would bring about change—that was the genesis of the natural capital committee under the inspired chairmanship of Professor Dieter Helm. That architecture in government is significant because the committee reports to the economic affairs committee, which is chaired by the Chancellor. That is important because it means that the natural capital debate is being hardwired into economic decision making.
	It is stating the obvious to say that decisions will be better if the true value of what nature provides for free is factored in. I have always loved the example that if bees decided not to go to work for 12 months, it would cost our economy more than £400 million a year. That is not fanciful thinking, but based on real experience of what happened in China where, as a result of pesticide use, the pollinators died and fruit trees had to be hand pollinated by Chinese labourers. I invite Members to consider what the bill would be by comparison in this country. It is, however, a sombre fact that that has happened.
	We are failing to conserve our natural capital assets, which is in stark contrast to the way we approach physical and financial assets. Such inconsistency comes at a high economic cost. Some of the natural capital that we have already lost is irreplaceable, but other parts can be regenerated. There are great opportunities for better management and stewardship of those natural assets, but that must be hardwired into the normal way we do business. Water companies have understood that rather than pouring chemicals into water to make it drinkable, simply paying farmers to keep the upland catchment clean can save money and the environment. Several water companies, including Yorkshire Water, South West Water and United Utilities, pursue the practice of paying for ecosystem services, and I expect other water companies to adopt the same practice.
	Recognising the potential of business opportunities through better management of ecosystem services led to the establishment of an ecosystems markets taskforce, chaired by Ian Cheshire, chief executive of Kingfisher, which sets out to practise what it preaches in the marketplace. The taskforce identified important economic opportunities in bioenergy, local wood fuel, water cycle management, soft flood defences, better use of waste, and using nature to enhance resilience—all at their heart showing a better understanding of the importance of natural capital.
	We all understand the importance of economic recovery in these austere times, but it is important that the return to growth is on a sustainable footing. A better understanding of how we use natural capital is essential to achieve that, so I agree with the natural capital committee that we need to develop a framework with which to define and measure natural capital. As the GLOBE initiative shows, that approach should be considered around the world as far as possible. I am not saying that every country should approach the matter in the same way, but legislators around the globe should recognise the importance of accounting for natural capital. It is salutary to recognise that some of the best practice does not come from the largest countries. Costa Rica is considering legislating on natural capital, and Peru has embedded natural capital in law. The work of GLOBE in showing legislators the approaches taken by other legislators is important.
	By a happy coincidence, when we launched the natural environment White Paper, a new tool—the national ecosystem assessment—was developed with the help of no fewer than 200 scientists from around the globe. The assessment allows us to measure natural capital. In other words, as a result of that excellent scientific work, we can put a financial figure on what we previously thought was free. I would go so far as to say that, were such an assessment applied to the use of land in Europe, the common agricultural policy could be made far more efficient. There is certainly scope for that. We currently pay farmers for stewardship schemes at entry and higher level. If funds were directed to payments for ecosystem services, there would be a tangible benefit to the farmer, other ecosystem users, the taxpayer and nature. What a shame, therefore, that the 2013 CAP reform missed the opportunity to achieve that while claiming to promote greening.
	Another major European policy—the water framework directive—could give a clear indication of the quality of the freshwater natural capital and its capacity to deliver ecosystems services, and not just as a part of those services. It is therefore in our interest to draw up that register of our natural capital assets and important that we understand which ones are most at risk, so we can prioritise our efforts to protect them. The committee’s report lists the wide range of those natural assets, from soil, water, air, carbon, energy and minerals, through to wild species habitats and landscapes. I therefore urge the Government to get on with overlaying those assets with a risk assessment and give us a time scale for achieving that.
	Ash dieback is an example of a significant loss of natural capital through natural causes. However, in order to estimate the loss, we need to map the distribution of ash trees, their age, profile and susceptibility to the disease, and then calculate the negative value of the loss. That could include the loss of timber and of the amenity for recreation, as well as loss of carbon storage and the impact on other species. The second part of the exercise would be to calculate what it would cost to restore ash tree capital. Those are practical examples of what embedding natural capital in policy making could achieve.
	That brings me to the important concept of offsetting for loss. The national planning policy framework says that the planning system should contribute to conserving and enhancing the natural environment by
	“minimising impacts on biodiversity and providing net gains in biodiversity where possible, contributing to the Government’s commitment to halt the overall decline in biodiversity”.
	One approach to compensation would involve the offsetting of losses, recognising the irreplaceability of some wild species and habitats. There is a significant opportunity to demonstrate that with the proposed high-speed railway. As there is an inevitable loss of green space to build the new line, it should be possible to create a significant offset for the loss of that natural capital. Not everything can be replaced. Ancient woodlands along the line of route will be lost for ever—more’s the pity—but new woodlands could be planted to buffer those at risk of being eroded and address the fragmentation of woodlands, which makes it difficult for species to migrate and sustain themselves. There could be a significant restoration of damaged natural capital. For example, we could restore the Tame valley, a polluted river valley on the
	east side of Birmingham that follows the spur of the new line into Birmingham city centre. Plans to deliver such natural capital regeneration have been drawn up by Arup, the engineers, and a professor of geography from Birmingham university—I commend them to my hon. Friend the Minister. Offsetting is a tool that could do a great deal to bring that vision about.
	In conclusion, I strongly support the recommendations of the natural capital committee, in partnership with my hon. Friend the Member for Beverley and Holderness; the framework within which to define natural capital; the risk register we need; and embedding natural capital fully in the UK’s national accounts. In addition, I wonder whether we can reach across from the public to the private sector and develop guidance on best practice in natural capital accounting and improve the treatment of natural capital in cost-benefit analyses. We should also take up a recommendation of the ecosystem markets taskforce and explore how natural capital accounting could be included in guidance on strategic directors reporting under the Companies Act 2006. I hope the Government urgently explore offsetting and other forms of compensation to restore and replenish lost natural capital. Together, we need to nail the myth that preserving and enhancing natural capital is somehow incompatible with economic growth.

Joan Walley: It is absolutely right for Parliament to be debating the first annual state of natural capital report, and for the chair of the all-party group for GLOBE UK, the hon. Member for Beverley and Holderness (Mr Stuart), to be leading the debate in Parliament. GLOBE has shown true leadership, both in the UK and internationally, in getting natural capital on to the agenda, and it is vital that the Government now take a lead. I congratulate the hon. Gentleman on securing this welcome debate. Given the way parliamentarians work, it is important that our constituents have an opportunity to have their voice, on how they protect nature, represented here in Parliament. For all those reasons, I value this debate.
	As the right hon. Member for Meriden (Mrs Spelman) pointed out, there is a conundrum. The natural capital committee’s work is a centrepiece of the natural environment White Paper. The extent to which the NCC informs policy is a key test of the White Paper’s ability to truly achieve the step change in how we value nature as a society. As Chair of the Environmental Audit Committee, a key issue for me is whether the Treasury is central to that process. I believe that it should be. The right hon. Lady set out how the NCC was established in May 2012 as an independent advisory body to Government, reporting to the economic affairs committee of the Cabinet Office, which is chaired by the Chancellor. In an ideal world, a Treasury Minister would be sitting side by side with the Department for Environment, Food and Rural Affairs Minister to answer the debate, because this is a cross-cutting issue. We are intent on drawing to the Government’s attention that is no good DEFRA having ownership of the agenda; it has to be reflected in each and every Department of Government. This is one challenge that Parliament faces.

Caroline Lucas: I completely agree with the direction in which the hon. Lady is going, but does she agree that one of the NCC’s crucial recommendations is the need
	for changes to the Treasury’s perhaps ironically named green book to allow decisions to take into account natural capital, even where robust valuations are not likely to be available? Does she agree that that is crucial? Unless the green book is amended in that way, with exactly the kind of integration she is talking about, economic and environmental concerns simply will not happen.

Joan Walley: As always, the hon. Lady anticipates what I am about to say. This has been a long-standing matter of concern both to myself and to the Environmental Audit Committee, which I chair. It is vital that the mechanism for integrating natural capital values into policy in the UK is reflected in the green book. I understand, as far as the green book is concerned, that a review is currently in progress.

Graham Stuart: The hon. Lady is absolutely right to mention the lack of representation on the Treasury Bench by a Minister from the Treasury. My right hon. Friend the Member for Meriden (Mrs Spelman) identified correctly the importance of having the Chancellor at the head of this process, so it is essential that we have a Treasury Minister on the Front Bench, too.

Joan Walley: There is agreement on this on all sides of the House. If policy decisions from the Treasury lock us in to investment for many years to come, we will be prevented from including the true value of natural capital in how those decisions are reached. Parliament has to find a way of having shared responsibility reflected in the Chamber. I hope the commitment, which I am sure we will hear from the Minister when he comes to reply, will be reflected in the Treasury, and that the Secretary of State for Environment, Food and Rural Affairs understands that the debate is not just about the economy in rural areas, but in each and every part of regeneration policy.

Neil Carmichael: I am a member of the Environmental Audit Committee, of which the hon. Lady is the Chair. Does she agree on the importance of incorporating this discussion in the debate on green finance, on which we will be doing a report shortly? Does she also agree that it is pivotal that we link up with the Treasury, DEFRA and all other Departments, because this needs to be a joined-up process?

Joan Walley: I absolutely agree. Certainly on green finance, this needs to be embedded at the heart of not just the Treasury, but the Department for Business, Innovation and Skills. When the right hon. Member for Meriden, who was instrumental in setting up the NCC, gave evidence before our Committee, she absolutely understood the importance of the Treasury and Cabinet Office taking on this agenda. I do not know how closely she is watching how the Government are following through on her work, but it is vital that the Minister picks up those responsibilities, which were put on the drawing board when the NCC was established, and follows up on all of this.
	The green book, which is under review, provides a good starting point for the cost-benefit analysis, but it does not include natural capital within its cost-benefit guidance, and it is important that capital stocks, including natural capital, be included in the review as potential
	constraints alongside the social cost-benefit analysis. What discussions has the Minister had with the Treasury on that? I know that the Woodland Trust, in particular, shares our view.
	The NCC contains many recommendations. As GLOBE said, one of the key questions is: what should the Government be doing? I would like them to commit to incorporating the value of natural capital in international accounting and policy-making processes by 2020 at the very latest. Will the Minister comment? In that regard, the work of the Office for National Statistics is critical, and certainly my Select Committee will be taking evidence on that and looking to see what progress is being made.
	It is not just about what we do nationally, however; it is about what happens internationally, as we heard just now. The Government need to take up the NCC’s report at the international level. I think of the work on the sustainable development goals, which, as we heard from the hon. Member for Beverley and Holderness, followed the Rio+20 conference in Brazil last summer. Securing appropriate recognition of natural capital accounting within the United Nations is important. As we have heard, so far the post-2015 high-level panel has emphasised the importance of the sustainable management of natural resource assets with regard to poverty eradication. It is important, however, that the Government go one step further. As the Government take the sustainable development goals further, will the Minister ensure that all capital accounting, including of the natural environment, is addressed as a specific goal?
	Progress at the UN can be made only if we make corresponding progress nationally, and here I wish to flag up the role of business, because this is not just about what the Government do; as many Members have said, it is about what business does as well, and many businesses accept that the global economy is entering a new era.
	The Prince’s Charities “Accounting for Sustainability” report was prepared in the run-up to the Rio conference and made a positive impact on the discussions that took place there the summer before last. In it, His Royal Highness the Prince of Wales said:
	“There was a time when we could say that there was either a complete lack of knowledge, or at least room for doubt, about the consequences for our planet of our actions. That time has gone. We now know all too clearly what we are actually doing and that we need to do something about it urgently. Better accounting must be part of that process.”
	In that report, and in the report that we are debating this evening, the business case is made for the integration of environmental and social information. Chief finance officers across industry are recognising that ethical breaches can collapse a company in no time. Work already under way by leading companies is reinforcing the natural capital committee’s recommendation for more work with leading companies’ accounting bodies, landowners and managers to develop and test guidance on best practice in corporate natural accounting. Will the Minister tell us how the Department for Business, Innovation and Skills is dealing with those issues?
	From the perspective of the Environmental Audit Committee, given our current inquiry into fossil fuel subsidies, it is pertinent that the Government should pay particular attention to the NCC’s recommendation for a review of the extent to which natural capital is being effectively priced and, in particular, for an examination
	of the scope for reducing perverse subsidies. What dialogue is the Minister having with the Department of Energy and Climate Change on that issue?
	The ways in which the Government take up the initial recommendations will depend entirely on the pressure that exists at local level. Whatever the Government do will go further if there is support for their actions locally. I commend a recent report from the Royal Society for the Protection of Birds that was launched here in Parliament last week. It sought to find out how connected to nature the children of the UK were, in an innovative three-year research project to establish a clear definition of connection to nature and, more importantly, a method for measuring it. The research highlights a wide range of benefits for children, society and the environment.
	We all accept that nature is in trouble. Indeed, we had a debate in Westminster Hall last week on wildlife crime. The hon. Member for Richmond Park (Zac Goldsmith) pointed out that the more we understand about wildlife, the better we can value and protect it. So it matters a great deal if we, as a nation, do not understand how much trouble nature is in. With 60% of our species in decline, the protection of wildlife must begin at home, in our childhood. The research study examined a representative sample of young people. In it, the desirable score relating to being in touch with nature was 1.5, but that score was achieved by only 21% of children. There were big differences between boys and girls, between different parts of the country and, in particular, between urban and rural areas.
	I happen to think that this matter needs to be addressed by the Government. We urgently need to amend our education legislation to make the teaching of sustainable development a duty. Many people agree with me on that, including educationists and practitioners who run field centres. The national curriculum can no longer overlook an understanding of the natural world. If the Government were to take on board that sentiment, it would chime with the direction of travel of the natural capital committee’s recommendations, and I ask the Minister to consider this possibility and to take up the matter with Ministers in the Department for Education.
	Finally, there is a need for a long-term policy framework that supports and incentivises organisations, including financial institutions, to value and report on natural capital. Arguably, however, the committee’s report is a statement of intent rather than a clearly defined route map. At this stage, it is much more about generalities and intentions than about clear recommendations. As the committee moves on from its first report, it needs to be much more direct and much more forward, and it needs to build on its clear set of principles by making specific recommendations—advice on offsetting, for example.
	When the Government come to review the natural capital committee in 2014, I hope that they will take some of those issues on board. The natural environment White Paper sets out an ambitious vision for nature and our natural capital assets. Genuinely embedding the value of natural capital into the fabric of economic decision-making is crucial to achieving that vision. The Government must now build on the work of the natural capital committee.

Roger Williams: I, too, congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on securing this evening’s debate. I thank the right hon. Member for Meriden (Mrs Spelman) for speaking so knowledgeably about this issue; she was responsible for seeing much of what we are discussing tonight come to fruition.
	The coalition agreement stated:
	“The Government believes that we need to protect the environment for future generations, make our economy more environmentally sustainable, and improve our quality of life and well-being.”
	Following on from that, the Government published the White Paper, “The Natural Choice: securing the value of nature”, a recommendation from which led to the setting up of the natural capital committee to provide independent advice to the Government on these important matters.
	It was done against the background of a previous century in which the world population had increased by 50%; there was a fortyfold increase in industrial output; and an increase of 16 times in the amount of energy used, greatly increasing emissions from sulphur and carbon. The natural capital was obviously put at risk by such a great increase in activity, and no policies were in place to ensure that it could be sustained and maintained.
	Let me draw a comparison between us getting to grips with the concept of natural capital now and what happened at the first Rio conference when the issue of sustainability was first put forward. It was difficult at that time to get people to understand what was really meant by that concept, and I think we are still wrestling a little with it at the moment. Sometimes the interpretation of sustainability is used to promote a particular argument or project that we might wish to advance.
	I was in a little chapel in Bryn Pont in Pontfaen in my constituency last night, where the Breconshire young farmers were having their harvest festival. They took the service themselves, being wonderfully able people. As I listened, I was thinking that, because of their role in land management and land ownership, they will be the people on whom much of this responsibility will fall. I wondered how they would grasp this concept of natural capital.
	I am sure that the people in the committee who wrote the report are very able and that they followed fully the academic rigour and, indeed, the financial accuracy necessary for such reports. However, I think that the committee has a little way to go when it comes to explaining the subject to other people. It will be advising the Government on policy, but unless people understand and can align themselves with that policy, it will be extraordinarily difficult for them to deal with it. For example, the report offers the following:
	“Definition of natural capital asset: Define the component of natural capital under consideration, the temporal and spatial scales being considered and the relationship between the natural capital asset and the services it provides, directly or in conjunction with other assets”.
	I am not sure how that can be translated into user-friendly language. What I am sure of is that a great deal of work will be required to enable people to associate themselves with the project.
	We have been given an example of the way in which natural capital can be used to assess the effect of a particular development, and then to offset it by replicating
	an environment or ecosystem that may have been damaged by that development. I think that the concept has a great deal to offer. I know that the Secretary of State for Environment, Food and Rural Affairs is particularly interested in using offsetting to allow economic development to take place in areas where it has been problematic in the past, and I attended a debate in Westminster Hall during which the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles)—who is responsible for planning—spoke about developments in national parks and how they could be facilitated. However, I think that we must approach the process with considerable caution, because it is sometimes almost impossible to replicate ecosystems that have been damaged by development. It may work in some instances, but in others the environment will be so pristine that it will be impossible to replicate it elsewhere.
	Mention has been made of the value of children and young people who have experience of the countryside and take part in activities there. On Saturday night I attended the first showing in Wales of a film called “Project Wild Thing”, which explained how we could encourage young people and give them opportunities to make the most of their experience in the countryside. There is also a National Trust programme entitled “50 things to do before you are 11¾”. I shall be sending a copy to my grandson, who has already undertaken one or two of the recommended activities. If we ensure that our natural capital can be maintained, it will greatly benefit the development and health of our children.

Joan Walley: Does the hon. Gentleman agree that it is important for all Members to do their utmost to arrange screenings of “Project Wild Thing”, which was launched by the Royal Society for the Protection of Birds in the House of Commons last week?

Roger Williams: I certainly do. It is a very inspiring film. People will interpret it in many different ways, but I am sure that every way in which it is interpreted, and implemented, will enable children to benefit from it.
	I think that the development of the concept of natural capital will be of considerable use to the Government when they are setting policy. However, one Member said that while it was some use if implemented nationally, it would be of greater use if implemented internationally.
	Some 12 of the 13 recommendations in the Committee’s first report are process recommendations—they are about the way this should be approached—but the 13th recommendation is about agriculture. It recommends that the common agricultural policy should be radically reformed and that as much of the pillar one money as possible should be moved to pillar two. I think that many of us would agree with that, but it depends on what the pillar two projects are. Also, it would be entirely inappropriate for policies to be implemented in this country while we have a single market that would put our farmers at a disadvantage to those on the continent.
	There is a graph in the report showing the wheat yields in this country. They have increased from about 1 tonne an acre to about 3 tonnes or more. Sadly, however— and chillingly in some respects—there have been reductions in wheat yields in this country in the last two years. For those two years we will be net importers of wheat, whereas we have been a wheat exporter in the past.
	We talk about farmers delivering public services. I think the greatest service the farming community can deliver is a sustainable supply of food at an affordable price. There is therefore a balance to be struck between food being produced by farming and the protection of the environment.
	This concept will be very useful and very informative for the Government in delivering their policies, but we need to show that the public understand the concept as well, and are able to engage with it.

Zac Goldsmith: I thank the Backbench Business Committee for finding time for a debate on this very important issue, and I congratulate the hon. Member for Brent North (Barry Gardiner) and my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on having secured these valuable couple of hours. It is a real pleasure to follow the speakers who have already contributed, and I agreed with so much of what was said that I have been radically cutting back on the points I wish to make in order to avoid boring the House to death. I will, however, make a few general remarks.
	The conservationist John Aspinall died a few years ago. Before he died, he wrote a letter in which he said:
	“Nature is the bank upon which all cheques are drawn.”
	It is a simple and utterly unarguable observation. Everything we have is ultimately provided by the natural world— by ecosystems—but in modern society, with all its extraordinary cleverness and genius, we have never bothered developing the tools for valuing the very thing on which we all depend.
	We are nothing without the natural world, yet concern for nature is seen, at a stretch, as a luxury add-on. That thinking permeates across the board. How many times have we heard our Chancellors caution that the economy must always be prioritised above the environment, as if somehow the two can be separated—as if we can flourish economically without that annoying thing called the environment? It is an extraordinary flaw in modern thinking.
	That flaw is, perhaps, understandable for our recent ancestors. They may have seen the world as simply too big to pollute—they may have thought the oceans were so deep that it did not matter how much we threw in them, and that there was so much forest that it did not matter how much of it we cut down. There is an explanation for the madness of previous generations, therefore, but not of today’s. With 15 of the world’s biggest fisheries collapsed or on the brink of collapse, with the world forest map visibly shrinking every year, with fresh water shortages affecting well over 100 countries, and with human trash clogging up our oceans—visible now even from satellite—it is obvious even to a child that we are going to hit a wall.
	Reconciling the market with the environment is a prerequisite for our survival as a species. It is our defining challenge. This slightly nerdy debate we are having about valuing natural capital is a central part of that.
	In practical terms, valuing natural capital is about putting a value on the free services provided by the environment, and not just valuing nature after it has been cashed in. My right hon. Friend the Member for Meriden (Mrs Spelman) gave an excellent speech on the value of pollinators to British agriculture, in which she
	said that the cost would be £400 million a year were they to stop doing their valuable work. The benefits that wetlands provide to water quality are estimated at about £1.5 billion per year. Other examples of natural capital include the value of natural flood plains in terms of flood defences. The UK national ecosystem assessment in 2011 calculated that if the UK’s ecosystems were properly protected and enhanced, they could add an extra £30 billion to the UK economy. The assessment also warned that:
	“Neglect and the loss of ecosystem services may cost as much as £20 billion to the economy per year”.
	Even now, at this early stage, we can see practical examples of what happens when natural systems are valued. We have heard about some examples, but I wish to give a couple more. Old flood defences on the Humber estuary have been re-engineered to allow controlled flooding in order to prevent further flooding of towns and land downstream. The scheme has created 440 hectares of valuable new wetland habitat and provides about £400,000 each year in flood protection benefits. That is a straightforward example of what valuing natural capital means. In Cornwall, South West Water has found that paying farmers to reduce the amount of pollutants from their land entering rivers provides benefits that, I am told, are 65 times more than the initial cost. So the farmers benefit, the environment benefits and the water companies benefit—this really is win, win, win.
	I wish to mention one other example from slightly further afield—since we are talking about the world and not just this country, I am sure that I will be allowed to do so. Vietnam has had a policy on payment for forest services since 2008, through which hydro plants, water companies and tourism companies must pay for the use of forest services. So, for example, more than $2 million is paid each year for the protection of the 276,000 hectares of forest in the Quang Nam province, of which 85% goes directly to local residents. The hydro companies protect their capital investments, because the trees prevent siltation and erosion, which ultimately shortens the life of their investment; the water companies have steady supplies of clean water; tourism flourishes; and local people have jobs and security. Again, everyone wins; the policy is a beautiful example of what this slightly abstract thing we are discussing means on the ground.
	I want to acknowledge the work of Dieter Helm and the independent natural capital committee, and of my right hon. Friend the Member for Meriden, who showed real, direct commitment in her time in office and has, without doubt, moved this issue on profoundly. However, this thinking needs to become much more mainstream in government and much more embedded in the decision-making process. We can all agree that we have a long way to go on that. To see that, we need only consider the Government’s impact assessment for the first 31 marine conservation zones, which calculated the costs to industry—about £1,000 per year—but failed to quantify the wider benefits of improving the health of the ecosystems. It did not look at how the zones added to the value of tourism and the fact that a healthy marine environment creates seafood. Those things were left out of the calculations.
	Unless the work of the NCC begins to have a real impact on decisions made across government, it can only ever be an abstract or academic exercise. I am not
	yet convinced that the key Departments have properly bought in to this. Only a few weeks ago, a number of senior civil servants from the Department for Business, Innovation and Skills appeared before the Environmental Audit Committee. I asked them at the end of our session, while things were still being collected and recorded, whether any of them had met up with anyone from the NCC. Not only had they not done so, but I think we can safely assume from the response we got that they did not even know what the NCC was. Would it not be wonderful if next time we debated this issue—I mean this as no disrespect to the great Minister we have on the Front Bench today—the Benches were packed and we were talking directly to the Chancellor? That would be a whole new ball game.
	On paper, I think that the UK is providing real leadership —that is not in doubt—and I know that other countries are watching our progress. My one request to the Minister is to persuade us, and anyone watching this debate, that the Government as a whole really are ready for the challenge and really have incorporated this thinking across all the Departments.

Andrew Stunell: I want to make just a few brief comments. I add my congratulations to the right hon. Member for Meriden (Mrs Spelman) on all the work she did as Secretary of State in the Department for Environment, Food and Rural Affairs. As I was a Minister in the Department for Communities and Local Government at the same time, I particularly commend her initiative in setting up a regular breakfast meeting of green Ministers across Government, which gave an opportunity for some of the cross-fertilisation of ideas that the hon. Member for Stoke-on-Trent North (Joan Walley) requested. I hope that the Minister can assure us that those cross-governmental ministerial links are being maintained. That is an important part of ensuring that the intention is translated into reality.
	I also commend the natural capital committee for its work and the focus it is bringing to this matter. I want, however, to pick up the point about how the governance will be managed. It is good that the committee is reporting to the economic affairs committee of the Cabinet, one of the most senior in the Government and one that is chaired by the Chancellor. As the hon. Member for Richmond Park (Zac Goldsmith) said, however, the meaning and context of that do not necessarily penetrate far into the civil service machine.
	If there had not been a request from hon. Members to the Backbench Business Committee, the subject would not have come before Parliament to be debated and discussed at all. Will the Minister give us some idea of how he believes the Government will manage the governance of the process? Will they ensure that when recommendations are made those involved are given serious professional support by the civil service in making presentations to the economic affairs committee and that the recommendations do not come in as item 13 on a busy day but get some serious consideration with proper ministerial input?
	There is no doubt that to do what has been asserted in the natural environment White Paper and subsequently by the natural capital committee does not require merely that an existing Government process should carry on while just being slightly better. Doing that needs a fundamental and complete shift in Government thinking,
	and that is not likely to be delivered by an external committee reporting to a Cabinet committee. It requires clear ministerial direction and, as the hon. Member for Stoke-on-Trent North said, that is needed across Departments of every type and shape.
	I hope that the Minister can give us those assurances. I know for a fact that the Government’s intentions are excellent. We have laid some good foundations, but if we want some good outcomes I believe that getting the governance right will prove to be the key to success.

Barry Gardiner: I refer Members to my declaration in the Register of Members’ Financial Interests.
	I would normally congratulate the hon. Member for Beverley and Holderness (Mr Stuart) on securing the debate, but of course he spilled the beans and said that I was the one, when I was on the Back Benches, who went before the Backbench Business Committee. I congratulate him instead on his excellent speech. I also want to take this opportunity, which is the first I have had, to welcome the Minister to his new role and to pay tribute to his predecessor, the hon. Member for Newbury (Richard Benyon), who was not only unfailingly courteous but totally committed to this agenda.
	Every society is defined by two things: what it creates and what it refuses to destroy. The only thing that sets us apart from our natural environment is our ability to reflect on our own place within it, but for all our cleverness we remain dependent on the extraordinary bounty that nature provides. The food and water that sustain us, the air that we breathe, the raw materials that we use as fuel and clothing or to construct our homes are only the most obvious of nature’s benefits. Equally important are the processes and services that purify our water, break down our waste, pollinate our crops and provide us with recreation and aesthetic or spiritual fulfilment. We have the right to use and enjoy the benefits of that natural capital, but that right gives us no licence to prevent our children from exercising a similar and equal use and enjoyment in the future.
	It is one of the imperative responsibilities of Government to be good stewards of the present and even better guardians of the future, yet the facts show how far we are from being good stewards. In the UK our native flora and fauna have been in decline for over 50 years. Agricultural intensification in the 1970s is often pointed to as a key turning point, but the truth is that for more than 200 years, as we chopped down our forests and used coal to drive the world’s first industrial revolution, we moved from a pastoral agrarian society to an advanced city-based economy that has failed to value biodiversity. In that time hundreds of species of plant and animal have been lost from our country. We need a radically different approach not just to halt, but to reverse that decline.
	One of the great advances in these two centuries is the progress we have made in classical economics. When Adam Smith wrote “The Wealth of Nations” or even when Karl Marx wrote “Das Kapital”, they understood capital to mean simply plant, machinery and money. But we have come to understand that there is such a thing as human, social and intellectual capital. We have come to realise that a well-functioning judicial system or an excellent education system are just as much a part
	of the wealth of a nation as its roads, its ports or its factories. The irony is that economists and economies have not yet caught up with the most important capital of all—natural capital. Virtually every other form of capital is derived in some way from natural capital and we can define it as the benefits that accrue to human society from the different species of life that inhabit the natural world.
	The right hon. Member for Meriden, to whom I pay tribute, spoke about pollination services. I remember that in 2006, when I was Minister with responsibility for biodiversity, I put £6 million into the Department’s budget submission for research into diseases in honey bees. When it came to agreeing DEFRA’s budget, the Treasury was not impressed. It insisted that times were hard and that with my £6 million it could create a new community hospital for people’s diseases, rather than worrying about bee diseases. I of course told the Treasury officials that I would be happy to cut the £6 million, but I asked them if they were aware that it would cost them £194 million a year. I explained that a recent National Audit Office report had pointed out that diseases in the honey bee population had reduced the pollination services that bees were able to carry out. This had reduced the yield from our arable crops, which in turn had reduced the revenue paid to the Exchequer by £200 million a year. The Treasury gave us the £6 million.
	The thing about Treasury officials is that they are simple beasts. They do not want to know about the environment or ecosystem services, but show them a way to save money and they become entirely reasonable. Classical economics values things in a very simple way. Take forests, for example. Classical economics simply adds the sale price of the timber that can be harvested and the alternative use to which the land may be put and says that this is the value of the forest. What utter nonsense. The true value of a forest lies in far more than that. Forests stop soil erosion. They prevent flooding by absorbing moisture and they control climate, often regulating local as well as global weather patterns. They are a source of medicines and food and they have recreational and aesthetic value, and all that is before we even begin to consider sequestration.
	In the millennium ecosystem assessment, 1,360 of the world’s top scientists showed that classical economics captured only one third of the actual value of the services that forests provide. The same is true for rivers, reefs, salt marshes, mangroves and all other natural ecosystems. We fail to factor their actual economic value into our policies and decision making, but because most of the other services that they provide are not bought or sold in markets, they are not normally taken into account, so the forests, reefs and rivers are lost or degraded.
	Another important consideration is that those wider benefits, although immensely valuable, do not accrue to an individual property owner. The benefits are experienced by the community at large. They are regarded as free goods by the wider community and the wider economy. In classical economics such free goods are called externalities, and because they are not directly captured by the landowner they do not feature directly in the landowner’s decision of how and whether to dispose of them.
	We use nature because it is valuable, but we abuse it because it is free. A nation’s GDP certainly increases every time money changes hands, but a growing GDP
	does not always create wealth. Many economic activities actually deplete wealth. The irony is that nations count that depletion as income, whereas they should see it as liquidation of capital. In fact, the TEEB—The Economics of Ecosystems and Biodiversity—report, edited by Pavan Sukhdev, has already shown that at current rates of decline the cumulative loss of ecosystem services from 2000 until 2050 will be equivalent to losing 7% of global GDP. Here is the challenge: how do we explain to those focused on GDP growth that they would make better economic decisions if they properly accounted for the very real value of natural capital?

Anne McIntosh: I bow to the considerable knowledge of the hon. Gentleman, who has just left the Environment, Food and Rural Affairs Committee. This Government have been very clear, as indeed were his Government, about wanting to put natural capital at the heart of their economic thinking. With regard to climate change that is very obvious, but in some Departments it is less so, so how do we value the natural capital input?

Barry Gardiner: The hon. Lady, whose chairmanship of the Select Committee is redoubtable, is absolutely right that that is clear in certain Departments but not in others. The way we value the input, as a number of Members have already indicated, is precisely the way contained in the natural capital committee’s first report to Parliament. The first thing we have to do—I will move on to this in more detail a little later—is to get each Department to create an inventory stating what capital it owns, what capital it affects and what capital it influences. Once we get Departments to look at it in that way, they can feed that into the Treasury so that better cost-benefit analysis is done and better economic decisions and policies are made.
	Some of our political colleagues act as if they are still living in the 19th century. They believe that economic prosperity and environmental protection are destined to be in conflict with each other, but in fact the opposite is true. In 2011 the green economy made up just 6% of the economy, but it accounted for 30% of all growth.
	Those on the economic right fall into the trap of thinking that the environment is the enemy of growth, but it is not. Their conclusion is that we must sacrifice the environment in order to achieve growth. But for those of us on the economic left there is an equivalent trap. Some on the left actually seem to agree with the economic right. Their claim is simply put the other way around: that economic growth is the enemy of the environment. Their conclusion is that we must sacrifice growth to achieve environmental protection. Both are wrong, of course, and they are wrong because they are locked into the same language of economic growth and environmental protection. They have failed to move into the new paradigm of economic wealth and environmental sustainability. There is a reason for that: the new paradigm requires a proper understanding of the value of natural capital, and not just an understanding of it, but a proper accounting of it.
	What competent business would fail to carry out a proper inventory of its assets? Yet that is precisely what we as a country have done. We have not looked at the
	stocks and flows of natural capital and properly assessed them. In the UK we are beginning to introduce a fundamental change in environmental policy. Instead of focusing on individual species or habitats, we are pioneering an approach based on whole ecosystems. We commissioned the UK’s national ecosystem assessment, which has established that 30% of the UK’s ecosystems are in decline and that many others are only just holding their own against an increasingly hostile background of rising population, consumption and pollution. However, the Government have not yet taken the important step of instructing all Departments to create an inventory of the natural capital assets they own, utilise and affect. The Minister should speak to his colleagues in Government to ensure that that happens.
	Quantifying the problem is the beginning of a solution. In the national ecosystem assessment, we have begun to put a value on the contribution of ecosystem goods and services to human well-being. The market has long known how to exploit the benefits of nature, whether by dumping waste at sea or chopping down rainforests with no thought for the wider damage that it was doing. But now, the most progressive businesses are beginning to understand the importance of sustainable supply chains. They are beginning to see the business imperative to reduce their own corporate risk profile and are now seeing genuine advantage in being net positive for the environment.
	The establishment of the natural capital committee in response to the United Nations convention to combat desertification conference of the parties in Nagoya in 2010 is a significant and positive move on the part of the Government. I welcome it. I pay tribute to the right hon. Member for Meriden for how she steered the issue through Government. She also established that the committee should report to the economic sub-committee of the Cabinet. Her officials had put to her that it should report to her as Secretary of State, but she decided that it should report elsewhere, knowing full well that a Secretary of State for Environment, Food and Rural Affairs was perhaps less powerful than the Chancellor of the Exchequer. She played a significant role in ensuring that the natural capital committee had the prospect of real success and traction. My hon. Friend the Member for Stoke-on-Trent North (Joan Walley) was entirely right to say that we should also have had a Treasury Minister on the Front Bench this evening.

Graham Stuart: The hon. Gentleman no doubt anticipates what I am about to say. He agrees that there should have been a Treasury Minister on the Front Bench tonight. It would also have been extremely helpful if Her Majesty’s Opposition had managed to get a shadow Treasury Minister, who are a great deal less busy than actual Treasury Ministers, to join us.

Barry Gardiner: I heartily endorse that. I will ensure that all these remarks are conveyed to my colleagues on the shadow Treasury Front Bench. I give the hon. Gentleman the commitment that they will get copies of my speech.
	Having a Treasury Minister here would have truly shown that the Government were not just paying lip service to the idea of natural capital but were listening to the recommendations of the natural capital committee—
	namely, that the Government should establish a framework to measure and account better for changes in natural capital assets, and to improve the valuation of those changes and how they are fed into policy decisions.
	The natural capital committee points out that the Government need to establish a risk register for natural capital assets that will clearly identify potential resource constraints or tipping points that may arise from the further degradation of our biodiversity. It insists that the implications for business supply chains from the loss of key natural resources must become a fundamental part of national economic planning. It recommends that the Office for National Statistics should include natural capital fully in the UK’s environmental accounts and that we should be working with business to develop guidance on corporate natural capital accounting.
	I pay particular tribute to the work conducted by the Prince of Wales’s accounting for sustainability project. A4S has worked with strategic corporate partners to identify $72 trillion of resources and environmental services that classically have been omitted from corporate balance sheets around the globe, to enable those businesses better to understand the risks to their own supply chains and ultimately their future sustainability unless they change their business model for one that respects and properly values natural capital.
	The Government should follow the prince’s initiative in involving business in accounting for natural capital. Will the Minister say whether he agrees with the suggestion of asking companies to prepare annual corporate sustainability reports for shareholders as part of their reporting cycle, in line with the business-led corporate sustainability reporting coalition’s recommendations?
	Let me say this loud and clear: some things are beyond price. Some values cannot be monetised. It is not just that the aesthetic and spiritual values of a mountain are difficult to quantify; we should not even try. We must recognise that those values should not be traded in any market. They are not directly comparable and we must not attempt to compare them on a like-for-like basis in any cost-benefit analysis. However, to recognise that is not to accede to the demands of the fundamentalists of both right and left that we should not sensibly ascribe a value to the mountain for the tourism benefits that it generates or the watershed services that it provides. These are real economic values and we conduct our policy decision making in wilful and deliberate ignorance if we ignore them. This is not to commoditise nature; it is to ensure that the true value of nature is not ignored and treated as a free good by those who for decades have peddled a false theory of value that has allowed them to trash the environment with impunity.
	The proper valuation of our natural capital is a means to its better protection, not a tariff sheet of charges for its destruction. The Secretary of State recently made several remarks that are deeply worrying because they have implied precisely the opposite. In his speech to the Association of National Park Authorities last month, he suggested that the protection of our finest countryside could be traded away to the highest bidder. This is quite simply a disgrace, and an ignorant one at that. Anyone with the slightest understanding of biodiversity offsetting knows that there is a hierarchy of principles that it must follow, foremost among which is that offsetting cannot downgrade or amend the existing levels of protection for biodiversity. The Secretary of State, by his ignorant,
	unscientific and dogma-driven approach, has shown himself to be incapable of leading the Government’s important work on natural capital and has probably done more to undermine the undoubted benefits that could flow from a proper system of biodiversity offsetting than any of the open-toed-sandal anti-development campaigners whom he so clearly despises .
	I am delighted that the hon. Member for Beverley and Holderness mentioned the work of the UN Statistical Commission on the system of environmental economic accounting. The UN has adopted SEEA as a new international accounting standard. It is important for the Minister to indicate to the House the Government’s commitment to develop the SEEA proposals and incorporate natural capital fully into their accounting framework by 2020.
	I am also delighted that the hon. Gentleman mentioned the work of GLOBE International and its excellent natural capital initiative. I had the honour of chairing the national capital legislation summit that he mentioned which took place in the Bundestag this summer. I agree with the importance that he placed on incorporating natural capital into the first 2015 sustainable development goals. I should like to put on record my thanks and appreciation for the support of the German Government, who have consistently, and with great vision, understood the importance of this work in tackling global poverty as well as in addressing issues of climate change and biodiversity.
	It has long been a fundamental principle that the polluter should pay. All too often, though, the polluter has got away with it because nobody has been able to answer the question, “How much?” In the UK we have set up the natural capital committee to ensure that the market and the non-market values of the public goods that nature provides are taken into account in all policy decision making. Our goal must be to incorporate these values into the standard Treasury method of cost-benefit analysis, our purpose being to stop those who seek to exploit the goods and services that nature provides by diminishing her continued ability to provide the essential ecosystem services and public goods that the rest of society needs.
	The state of natural capital in the UK is at a critical point. Thirty per cent. of it is in decline, and action now is essential. The natural capital committee has produced an important report, but the Government must listen to what it says and implement its recommendations.

George Eustice: I thank my hon. Friend the Member for Beverley and Holderness (Mr Stuart) for bringing this motion to the House. He has consistently championed the cause of the environment, and he made a number of incredibly important points in his speech. Like many others, I acknowledge the work done by my right hon. Friend the Member for Meriden (Mrs Spelman). It is important to recognise that a lot of the work we are doing now stemmed from the natural environment White Paper. After having been elected, one of the first things I did early in this Parliament was to attend the launch of that document at Kew. I remember it well. It was a very important piece of work, and she is to be commended for it.
	To prove that there can be some cross-party consensus on this issue, I acknowledge the work that the hon. Member for Brent North (Barry Gardiner) has done through his chairmanship of the all-party group on biodiversity and his consistent interest in its potential. However, I must take a little issue with his strong criticism of the Secretary of State. I can vouch for the fact that my right hon. Friend believes passionately in these issues, of which he is a real champion. He regularly speaks to Dieter Helm, the chairman of the natural capital committee. I therefore do not agree with the hon. Gentleman’s criticism on that front, but perhaps we can come back to that later.
	As every Member who has spoken has said, the state of natural capital is a crucial issue and the scale of the problem is great. Recent studies, such as the national ecosystem assessment and the “State of Nature” report prepared by the Royal Society for the Protection of Birds and others, drew on the excellent work of experts and volunteers across the country. They have reinforced the Government’s view about the worrying trends in the state of our natural assets.
	We are constantly learning more about the complex mutual dependencies that underpin our vital ecosystems, but we are also finding evidence that shows that these intricate systems are, indeed, under threat. As many Members have said, 30% of the UK’s ecosystems are in decline. The numbers of specialist farmland birds, for example, have plummeted.
	Although the overall condition of the natural environment is a cause for concern, we should also acknowledge that there have been some significant success stories that demonstrate what can be achieved when there is a will to do so. For example, environmental legislation has helped to transform many of our watercourses, and rivers that were once notoriously polluted now sustain a variety of wildlife. Of course, although these successes are heartening, important aspects of our natural environment are still in decline. The status quo is therefore not acceptable and a concerted effort on the part of Government and society is necessary to turn things around.
	As part of their efforts to halt and reverse degradation of our natural environment, this Government have pledged to improve their understanding and measurement of England’s natural capital. It is, therefore, extremely encouraging to hear that the Government’s commitment to advancing the natural capital agenda is shared by Members from across the political spectrum.
	A number of Members, including the hon. Member for Stoke-on-Trent North (Joan Walley), have said that a Treasury Minister should be present instead of me. All I can say is that I am passionate about this issue and I am here to represent the Government. It is usually only one Minister who responds to this type of debate. Members have said that they would have preferred a Treasury Minister to be present and I will not take that personally, but I am afraid that tonight you’ve got me. It is important to note that the Treasury is heavily involved in this issue. The response to the NCC’s first report was co-signed by the Secretary of State and the then Economic Secretary, my hon. Friend the Member for Bromsgrove (Sajid Javid).
	A number of Members have asked what we are doing to get the principles into the green book. I have three points to make in response to that important question. First, following the publication of the natural environment White Paper in June 2011, the Treasury and the Department for Environment, Food and Rural Affairs published in 2012 supplementary green book guidance on accounting, so consideration has already been given to including environmental impacts in cost-benefit analyses by Government Departments.
	Secondly, I reassure Members that the NCC is currently in discussions with the Treasury and DEFRA about developing the green book so that we can take further steps. Thirdly, DEFRA has commissioned a baseline evaluation study to review how well recent impact assessments across government take into account environmental impacts. We are, therefore, taking a number of steps.

Graham Stuart: I wonder whether the Minister took note of my point about the Government response—the letter. He has just laid out how the Government are responding in a serious way, but will he undertake that when the next state of natural capital report is published in nearly a year, it will receive as full a response as that which we would expect for a Select Committee report?

George Eustice: I hope my hon. Friend will find that the remainder of my speech will pick up on a lot of the themes of the 13 recommendations made by the NCC report.

Graham Stuart: I recognise that my hon. Friend is new to his post and that he is in a difficult position, but it really would be helpful if he could commit on the record to provide a full response to next year’s report. This debate was called not by the Government, but by the Backbench Business Committee, and we cannot rely on a debate such as this to ensure that the Government are held to account on something so important.

George Eustice: I take on board my hon. Friend’s point. Lord de Mauley leads on this element of the Department’s portfolio and I speak on it in the House of Commons. I will discuss the point that my hon. Friend has made with him.
	It is not surprising that there is a consensus that natural capital matters. It underpins fundamental aspects of all our lives. We rely on natural capital for the air that we breathe, the food that we eat and the water that we drink. It is also a crucial source of energy and well-being. It will play a central role in mitigating the potential impacts of climate change. It may even provide the key to scientific and technological innovations. It is the foundation on which our economy is built. My hon. Friend the Member for Richmond Park (Zac Goldsmith) gave a fabulous quotation from John Aspinall:
	“Nature is the bank upon which all cheques are drawn.”
	That is very true.
	Despite its importance, we have taken natural capital for granted. For too long, the value of our natural capital has been disregarded and, as a consequence, degraded. In the past 50 years, in spite of growing environmental awareness, many of the pressures on the natural environment have accelerated. Short-term, short-sighted economic gains have been prioritised. Too often, that has come at the expense of the natural environment.
	It is clear that if the habit of eroding our natural capital assets is allowed to continue, it will ultimately, as my right hon. Friend the Member for Meriden said, be at the expense of future generations and their economic well-being. If economic growth is not sustainable, frankly, it will not be sustained. If we do not actively attempt to understand the true value of natural capital, we will continue to set its value, wrongly, at zero.
	Many people in the UK already place a value on nature. Members may well have heard enough about the BBC for one day, but the growth in popularity of programmes such as the BBC’s “Countryfile” demonstrates that we are a nation that cares passionately about the natural environment. The widespread appreciation of nature’s intrinsic value, the importance of which many Members have highlighted, is demonstrated by the large memberships of groups such as the RSPB and the wildlife trusts. To those who say that unless we put a monetary value on something, it is not valued, I say that that is not the way that the public see it. They see a great intrinsic value in our natural environment.
	Valuing our natural assets in terms of their worth to the economy in pounds and pence is a challenging exercise. We will have to involve the dedicated efforts of world experts to come up with the right calculations. However, it is important that we do not see valuing nature as just a dry, academic exercise that is performed by accountants. The natural capital agenda must, and will, have a practical application that will lead to real outcomes in our natural environment. If we want to protect nature, we need to make better decisions about how we use it. Those decisions will be better informed when we have properly measured and valued our natural capital.
	That is why the Government set up the natural capital committee in 2012. In doing so, we were acting as a global leader. We now lead the way by having an independent group of experts that reports on where our natural assets are being used unsustainably. Ultimately, the committee will advise the Government on how we can prioritise action to address the most pressing risks to our natural capital. That advice will better enable the Government to fulfil their vision, first set out in the natural environment White Paper of 2011, of being
	“the first generation to leave the natural environment in a better state than it inherited.”
	With that vision in mind, I read with interest the committee’s first state of natural capital report, which was published in April this year. It set out a framework for how the committee would deliver its ambitious work programme. The report highlighted just how high the stakes are for the environment and the economy in work that the committee is doing. The committee argued powerfully that the environment and the economy are not rival priorities that have to be traded off against each other, but that environmental and economic interests can and must be aligned. The report set out how that beneficial alignment can be realised.
	Although we have enough data to be confident that our natural assets, for the main part, are being degraded, we do not measure directly changes in their extent or quality on a widespread basis and we do not account for them in national or business accounts. It is therefore not currently possible to identify systematically which natural capital assets are being used unsustainably, but the work of the committee aims to get a better handle on that.
	The committee’s first report not only set out the need for a framework to measure and value our natural assets, but also contained a number of recommendations to help get that framework in place. When the report was published, the committee promised to follow up in its second and third reports—due in early 2014 and 2015 respectively—with more specific advice about where assets are at risk of not being used sustainably, and what needs to be done about it.
	The Government support the analysis set out in the NCC’s first state of natural capital report, as detailed in the joint letter that my hon. Friend the Member for Beverley and Holderness referred to from the Environment Secretary and the Economic Secretary to the Treasury. The letter stated:
	“We welcome the report’s conclusions and we look forward to working with the Committee as they and others advance this agenda.”
	I can report that good progress has been made on the recommendations contained in the report, by both the Government and the NCC. For example, in order to determine whether we are on a sustainable path, the NCC has commenced two pieces of work to help understand which assets are in decline—and to what extent—as well as which are most at risk. The NCC will report on its initial findings in its next report. We are interested to see how that might inform other Government policies, such as biodiversity offsetting, which a number of hon. Members—including my right hon. Friend the Member for Meriden—have mentioned.
	On national and corporate accounting, which was mentioned by the hon. Member for Brent North, good progress is being made. On national natural capital accounting, the NCC is working closely with the ONS and DEFRA to implement the road map to 2020 that the ONS published in December 2012, setting out its timetable for producing natural capital accounts. On the corporate side, the NCC is engaging with a series of major businesses and landowners. It is about to undertake a series of pilot projects with a selection of those businesses in order to trial natural capital accounting in a real-world context and see whether it is an effective tool for encouraging businesses to operate on a more sustainable basis.
	Let me touch on some of the points that my hon. Friend the Member for Beverley and Holderness raised at the end of his contribution. He asked for a response to each of the 13 recommendations, and as I have said, I will take his comments back to my noble Friend Lord de Mauley. A lot of those recommendations are being taken forward by the NCC, and many others are addressed in the good “Accounting for the value of nature in the UK” report by the ONS.
	A number of Members asked whether we believe that the framework should be developed, and the Government agree that it should be. That is a task for the NCC, which is working further on that. Importantly, the committee is not doing just a single one-off report that is then placed in the Government’s hands; it is continuing to work on many of these elements. Many hon. Members raised the importance of developing a risk register, and I confirm that the second report from the committee will look further at a risk register and at highlighting those areas where we use our natural environment in an unsustainable way. The next report will contain the first steps in that direction.
	In conclusion, we are very much looking forward to the NCC’s second report, due to be published in spring 2014, and to the more specific recommendations we expect it to contain. We are particularly interested in what it might have to say about a proposal for a long-term strategic plan to ensure the preservation and recovery of natural capital in this country.

Mr Speaker: For a brief wind-up of the debate, I call Mr Graham Stuart.

Graham Stuart: Thank you, as ever, for your strictures, Mr Speaker.
	It has been a great pleasure to take part in the debate. We have heard high-quality speeches from hon. Members on both sides of the House. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) followed my speech and showed a strong understanding of the key issues. My right hon. Friend the Member for Meriden (Mrs Spelman), in so many ways the architect of the current situation, spoke of offsetting and of the economic importance of humble bees and pollinators. The hon. Member for Stoke-on-Trent North (Joan Walley) mentioned the green book—the Minister did not mention that, but perhaps we will hear more from him about it in due course—and the role of natural capital in the sustainable development goals. She also referred to other Departments and asked whether the Minister is in touch with them.
	My hon. Friend the Member for Brecon and Radnorshire (Roger Williams) put his finger on one of the most important challenges that we face. For the most part, we are a group of the usual suspects, talking about natural capital late at night. In the Tea Room earlier, a colleague said, “In eight years in this place, I have never looked at the title of the debate and not known what it was about—until now. Well done, Graham, you’ve got a debate I don’t understand.” My hon. Friend correctly identified the importance not only of the Breconshire young farmers, but of communicating properly with them so they understand what on earth we are talking about. If we do not achieve that, in a few years, the same group of usual suspects will be discussing the topic without wider resonance.

Joan Walley: Does the hon. Gentleman agree that that is one reason why there should be a measure to include the subject in education legislation?

Graham Stuart: I feared the hon. Lady would try to nail me personally on that—I spend my time chairing the Select Committee on Education resisting the forcible
	addition of financial education and a plethora of other subjects into the national curriculum—but I will bear her remarks in mind and see whether I can reconsider my almost-ideological response.
	My hon. Friend the Member for Richmond Park (Zac Goldsmith) made a powerful speech. He said that reconciling the market with the environment is essential to our survival—one of a few memorable quotes from the debate. He also asked whether the Government as a whole are ready for the challenge, which neatly summed up a question included in many speeches.
	My right hon. Friend the Member for Hazel Grove (Sir Andrew Stunell), using his experience of Government machinery, focused laser-like on questioning whether the machinery is in place to ensure that natural capital debates are not a minority sport that take place late at night in the Chamber, and that they begin to influence Government policy in all Departments.
	Because of my history with the hon. Member for Brent North (Barry Gardiner), it hurts me to say that he made a barnstorming and powerful speech. He spoke of not only halting but reversing environmental loss. He spoke with both passion and knowledge and managed to convey them succinctly and effectively. He said that people in the Treasury could be reasonable as long as we speak to them in their language. He gave us two quotes. First, he said that we use nature because it is valuable, but abuse it because it is free, which goes to the heart of the debate. Secondly, in defence of that approach, he said that promoting the concept of natural capital was not to commoditise nature, but to ensure its protection.
	We heard an excellent speech from the Minister, who, as he said, has been interested in natural capital for a long time—he was at the launch of the White Paper a few years ago. He and the other Ministers in his Department have a great challenge, but there is a wider challenge across the Government. That is the central issue. My hon. Friend the Member for Richmond Park made the point that, in future, we need Treasury Ministers and colleagues who do not habitually focus on this policy on the Treasury Bench in such debates. I am delighted to see my hon. Friend the Minister of State, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), who is the Minister for civil society there as he, too, has long taken an interest in natural capital.
	With that, I draw the debate to a close.
	Question put and agreed to.
	Resolved,
	That this House welcomes the Natural Capital Committee’s first annual State of Natural Capital report; and urges the Government to adopt the report’s recommendations and to take concerted action to embed the value of natural capital in the national accounts and policy-making processes as early as possible.

STROKE (EMOTIONAL AND PSYCHOLOGICAL CONSEQUENCES)

Motion made, and Question proposed, That this House do now adjourn.—(Mr Gyimah.)

Helen Jones: As the chair of the all-party group on stroke, I am pleased to have secured the debate.
	When I was in my early twenties, my father had a stroke. He was sent home from hospital, an extra rail was put on the stairs, he was given a walking stick and consigned to the care of my mother. He received very little help and support, and we did not know what to expect or how best to help him. I watched him struggle desperately hard to get better, but we did not know how best to support him.
	My father had a second stroke and died. Nowadays, his chances of a physical recovery would be very much better. The previous Labour Government’s investment in stroke networks and specialist stroke units have improved the outcome for stroke patients hugely. More people are now admitted to a specialist stroke unit, more people who can benefit from clot-busting drugs get them, and two thirds of people get a brain scan within 24 hours. There is a lot more to do, but there is no doubt that great progress has been made. However, our investment and progress in the psychological and emotional support of stroke survivors has not kept pace with physical care, despite the fact that stroke is the biggest single cause of severe disability in adults.
	One cannot prepare for a stroke, because it is a sudden and catastrophic event. If the part of the brain that deals with emotions is affected, many people find themselves thinking, feeling and behaving in an entirely different way. Many suffer feelings of anger and frustration because they can no longer work, care for their families or do even simple tasks. It is not surprising, therefore, that anxiety and depression often result. Families, too, can find themselves in a difficult position, sometimes in the worst cases grieving for the person they have lost while still taking care of that person.
	The emotional and psychological effect of stroke was set out by the Stroke Association last year in its report, “Feeling Overwhelmed”. I am grateful to it for its research, and to the people who came to the parliamentary reception we held and were kind enough to share their experiences with me. The effects can be seen in all age groups, but are particularly severe in the 30 to 59 age group, where 76% of people who responded to the Stroke Association’s survey reported feeling severe anxiety and 69% suffered from depression. People find that they lose control of their emotions after a stroke, and it is estimated that two thirds suffer from post-traumatic stress. Despite that, we do not have the services in place to support them. In response to the survey, 42% felt abandoned when they left hospital, and two thirds said that their psychological care did not match the physical care that they received.
	If we are going to change that, we have to see psychological and emotional support following a stroke as just as important as physical rehabilitation, and we have to accept that it can be needed for a long time. One person, for example, told the Stroke Association:
	“Many of the emotional issues arise, not at the time of the stroke when all you are doing is trying to get well again physically, but it’s months later when the reality hits you that you will never be the person you once were.”
	It is not surprising that many people experience feelings of anger and lose confidence. Their greatest fear is often, understandably, of having another stroke. Some people suffer from aphasia, which is a common side-effect of stroke, yet they seldom get the care that they need. For example, one person said to the Stroke Association:
	“Because I looked and still look physically well, I had hardly any help in dealing with inability to read, write and understand speech, lack of confidence or emotional problems.”
	That person was given just three sessions of speech therapy—totally inadequate.
	Another man told how, despite his inability to speak, write or comprehend letters, he was discharged to the care of his children, aged 16 and 14 at the time. This lack of care cannot be justified.
	Motion lapsed (Standing Order No. 9(3)).
	Motion made, and Question proposed, That this House do now adjourn.—(Mr Gyimah.)

Helen Jones: These stories are not uncommon, and we have to begin to take them seriously. We would not accept such lack of care for us or any of our families, which means it is not suitable for anyone else either.
	Carers, too, can suffer an awful lot of emotional distress. When the Stroke Association surveyed carers, it found that distress increased the longer someone had been caring: 48% of those who had been caring for three years or less suffered from stress; that figure rocketed to 69% among people who had been caring for seven years or more; 79% suffered from heightened anxiety and 56% from depression. Not tackling that is simply not good enough. These people take on a burden willingly that most of us could not cope with and save this country millions of pounds. We cannot, and should not, leave them unsupported.
	I hope we all recognise the moral argument for doing these things, but there is also an economic argument. Research by the stroke improvement programme in England—sadly, no longer in existence—showed that an investment of £69,000 in psychological support using a properly led, multidisciplinary team could save £108,000 in NHS social care costs in two years. When the King’s Fund researched the link between long-term conditions and depression, it found that care costs for those who suffered from depression and a long-term condition were about 45% higher, typically, than for those who did not suffer from depression. Moreover, depression can increase the risk of another cardiovascular incident—in other words, of a stroke. A person is one and a half times more likely to have another stroke if they suffer from depression.
	We should be taking seriously the need for psychological and emotional support after a stroke. We ought to be doing three things in particular. First, we need to see psychological support as an essential part of the care pathway for stroke survivors. At the moment, only half of stroke units have access to psychological support. That needs to change, and I should like to hear from the Minister what she plans to do about recruiting more
	clinical psychologists and putting in place those multidisciplinary teams to support stroke survivors. We ought to recognise, too, that the need for support is not a one-off; it might occur throughout life. That is particularly true, for instance, for children or young people who have suffered a stroke. We do not think of stroke as a disease of the young, but it can be, and young people often need support at particular moments in their lives—when they start school or dating or when they move away from home, for example.
	Secondly, we must ensure that people get timely and accurate information about the services available to them, whether in the voluntary sector or in health and social care. At the moment, trusts differ enormously in the information they provide to people. We must also ensure that those who suffer from aphasia are talked through the information and helped to understand what is available to them. The voluntary sector has an important role to play in this. Many people find stroke clubs extremely helpful, for example. People who have suffered a stroke often feel alone, and mixing with others who have been through the same thing, learning from their experience and going out and socialising with them can be of enormous benefit.
	Thirdly, I should like the Minister to pay attention to the need for all stroke survivors to get a proper assessment of their health and social care needs, and a written care plan. Although that should happen at the moment, people are telling the Stroke Association that they do not always get that assessment. In fact, one survey discovered that only 39% of respondents had had such an assessment, and that of those, only 60% got a written care plan. Good practice means that people should get an assessment six weeks after leaving hospital, then at six months, and annually thereafter. In fact, 47% of the people who said that they had had an assessment only ever had one. That needs to change. It is also vital that we support carers, and that they know the services that are available to them. At the moment, two thirds of carers say that they have received no support, help or advice on dealing with their emotional problems, and only a quarter say that they feel supported after the person they are caring for has left hospital.
	As chair of the all-party parliamentary group on stroke, it has been my privilege to meet some remarkable people. I have met young people who are setting out on life with enthusiasm despite what has happened to them, determined to make a life for themselves, to work and to be part of the community. I have met people who have struggled with severe disabilities but still gone on to help others. I have met people who are determined to put something back into the community by setting up stroke clubs or using art to help others, and who see that as their way of paying back for the care that they have received. It has been an enormous privilege to meet people like that, but at the moment, we as a society are failing them by not giving them the help and support that they need to make a life for themselves after stroke.
	I hope that the Minister will see the importance of bringing about change in this area by improving psychological services for stroke survivors in the same way that we have improved their physical care in the past. I look forward to hearing from her how the Government propose to take that forward.

Jane Ellison: I congratulate the hon. Member for Warrington North (Helen Jones) on securing this debate on an important issue that affects so many of our constituents. She spoke with great knowledge and passion about the subject. I am also aware of the great work that she does as chair of the all-party parliamentary group on stroke.
	Stroke is one of England’s biggest killers. It is the single largest cause of adult disability. Its effects can be devastating, both for those who have a stroke and for their families and loved ones. It is worth reiterating the great progress that has been made in tackling stroke, particularly the physical aspects, in recent years. Many thousands of people have benefited from that. Fewer people now die from stroke; mortality rates dropped by 37% between 2001 and 2010.
	Treatment for stroke has improved in a number of areas, as the hon. Lady mentioned. Stroke patients do better when they are treated on a stroke unit, and over 83% of stroke patients now spend the majority of their hospital stay on a stroke unit. Access to immediate brain scanning is vital, and has improved considerably, as has access to clot-busting drugs, which give people a better chance of regaining their independence following a stroke. We all want that progress to continue, and that is why stroke remains a priority for the Government and the NHS. We also know, however, that we need to do more to improve support for people after stroke, which is the subject of tonight’s debate.
	When it comes to national incentives to improve outcomes, stroke is covered in two parts of the NHS outcomes framework and the mandate to NHS England. Through the mandate we are monitoring how the NHS performs both in reducing mortality from cardiovascular disease, including stroke, and in improving recovery from stroke. Some stroke survivors are unfortunately left with long-term disabilities, as was said, so how we support people with long-term conditions will be important to them. Through the mandate, we are monitoring how the NHS is performing in supporting people to look after themselves; whether a person is able to live as normal a life as possible; and how successfully the NHS manages long-term conditions by looking at unnecessary hospital admissions and excessive length of stay in hospital.

Helen Jones: The Minister refers to the outcomes framework, but will she ensure that it focuses not just on physical rehabilitation, but on psychological support, because both are essential if people are to go on and build a life for themselves after stroke?

Jane Ellison: Quite. Because the focus of the framework is about recovery from the stroke, it includes exactly what she says—not just physical recovery, but psychological and emotional recovery, too. Much of what we are trying to do is to set about getting people on that full pathway towards recovery, not focusing only on acute symptoms and the immediate aftermath of the stroke.
	The clinical commissioning group outcome indicator set mirrors the areas we are monitoring for stroke and for long-term conditions. This is the indicator set that will be used to hold CCGs to account and to provide information for the public on the quality of services and the health outcomes achieved through that local
	commissioning. The CCG indicator set also contains measures to ensure stroke survivors are discharged from hospital with a joint health and care plan, and receive follow-up assessments within about six months. I have heard what the hon. Lady said—that this is not happening. I have taken note of it, and it will be discussed with NHS England and all those responsible. It is our clear objective to do that. I appreciate the information the hon. Lady has given us about the Stroke Association’s work in monitoring whether it is really happening. It is obviously a priority. The new Sentinel stroke national audit programme will also monitor the outcomes of stroke care in all patients six months after stroke.
	When patients leave hospital, it is important that the NHS and social services work together to get the right services in place to ensure they have the support they need to make the best possible recovery. The measures and indicators I have talked about, alongside a shared measure in the adult social care outcomes framework on the success of re-ablement and rehabilitation services, provide an incentive for the NHS and social services to work together to ensure that happens.
	The adult social care outcomes framework is helping us to gauge the progress made by local services and to promote improvement in standards across the country. A key area of the framework is to reduce the need for care and support—exactly as the hon. Lady said—and delay any dependency. Those measures will support the sector to maximise people’s level of independence and minimise their need for ongoing support. Under the framework, local authorities will be able to compare their performance with that of other authorities around the country—we obviously want everyone to match up to the standards of the best—and to make improvements based on what has been proven to work elsewhere. Through that common focus for improvement, the NHS, public health and adult social care outcomes promote joined-up, integrated care, driven by the needs of the individual. For stroke survivors, this means providing access to the support they need to get that better quality of life.
	I shall now deal more specifically with the issue of emotional and psychological support for people who have had a stroke. The cardiovascular disease outcomes strategy, published earlier this year, recognises that stroke services that incorporate psychological care deliver the best outcomes for people who have had a stroke. There are also national stroke strategy recommendations and evidence-based national guidance that patients should be routinely screened for mood and cognition after their stroke. These recommendations are included in the National Institute for Health and Care Excellence quality standard on stroke. That answers the question the hon. Lady posed about whether these were at the heart of what we saw as best care—very much so.
	It is, of course, the responsibility of NHS England and CCGs to ensure that stroke patients receive the psychological and emotional support they need. NHS England recognises that this area of stroke care is of great importance for many patients. Improvement in community services with greater access to early supported discharge teams and longer-term rehabilitation is also high on NHS England’s agenda.
	NHS England is also exploring ways of improving the use of existing resources. The hon. Lady will be aware of Improving Access to Psychological Therapies,
	an NHS programme that is rolling out services across England that offer interventions for people with depression and anxiety disorders. Many areas now have IAPT, which benefits people including those who are suffering from symptoms following a stroke. I understand that there have been discussions about how the IAPT teams might increase the proportion of the time that they spend with people whose psychological problems are secondary to physical disease, but are none the less important and—as the hon. Lady said—sometimes become more important as time goes on.
	Some IAPT services have developed psychological support skills through enhancing the training of nurses and therapists, and some have employed the services of counsellors to support people who have had strokes in the community. I know that some of the good local examples of support for stroke survivors and their families are in the hon. Lady’s constituency. She will be well acquainted with initiatives such as the family support service, which helps stroke survivors and their families to adjust to life after a stroke, and the communication support service, which helps people with aphasia and other communication problems to cope. Stroke sufferers and their families can also receive emotional and psychological support via the local IAPT service.
	It is for NHS England to consider how to spread best practice from services such as those in Warrington, using some of the frameworks that I have described. However, I am glad that the hon. Lady has taken this opportunity to bring the issue to Parliament, because I feel strongly that Parliament has an important role to play in highlighting great practice and spreading the word about good local initiatives such as those to which I have referred.
	We recognise that, while supporting those who have had strokes, we must also support those who care for them. We set out our priority areas for action on carers in our paper “Recognised, Valued and Supported: next steps for the carers strategy”, which was published in November 2010. We have also made available to the NHS additional funding of £400 million between 2011 and 2015 so that carers can be given much-needed breaks to sustain them in their caring role. Carers are central to the Government’s proposals for care and support, and, as the hon. Lady will know, the Care Bill offers significant improvements in that regard. I am sure that we shall hear far more on the subject as the Bill progresses through Parliament.
	Once again, I congratulate the hon. Lady on securing the debate and raising the profile of this very important issue. I shall consider the specific issues that she raised with which I have not been able to deal tonight. I shall also be happy to engage in a continuing dialogue with her and with the Stroke Association. I have read the association’s 10 key indicators and familiarised myself with them. However, the issue is so important to so many people that there must clearly be an ongoing debate about how we can ensure that the very best care is provided throughout the country, because we need the consistency to which the hon. Lady referred.
	Let me end by paying tribute not just to all those who work in the NHS, but to those in the voluntary sector who care for stroke patients and their families.
	Question put and agreed to.
	House adjourned.